Petition for Writ of Certiorari — City of Gettysburg, South Dakota v. United States (No. 06-235)

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(() Supreme Court, U.S.

rimer

06-235 AuG 14 2006

No, OFFICE OF THE CLERK

Jn the Supreme Court of the Anited States

Ciry OF GETTYSBURG, SOUTH DAKOTA,

Petitioner,

UNITED STATES,

Respondent.

On Petition for a Writ of Certiorari

to the United States Court of Appeals

for the Federal Circuit

PETITION FOR A WRIT OF CERTIORARI

M. MILLER BAKER

Counsel of Record

MICHAEL S. NADEL

JEFFREY W. MIKONI

McDermott? WILL & EMERY LLP

600 Thirteenth Street, N.W.

Washington, D.C. 20005

(202) 756-8000

Attorneys for Petitioner

City of Gettysburg, South Dakota

August 14, 2006

QUESTION PRESENTED

Whether this Court should exercise its supervisory

authority to require that federal courts of appeals articulate

some explanation or rationale for the disposition of appeals

taken as a matter of statutory right.

PARTIES TO THE PROCEEDING

The parties to this proceeding are the same as the parties

to the proceeding in the United States Court of Appeals for

the Federal Circuit: Petitioner City of Gettysburg, South

Dakota; and Respondent United States.

iii

TABLE OF CONTENTS

Question Presented....cccccecssssessee A ATS eneseneeses Oe Me NOI

Parties to the PHOCEEMING..........sssssesssssesessessessressencseessaqeeseenens

| Ne er PN vsiiiadevdicacnscsiinndendtancaturiiitdetaieeaissacensiamiiities

IE EES ER ELLE ATEN EAN SETTLER TE OSE

Jurisdiction

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NR OE TIN Mah bscictsdaiinssies:sstiecnenasdineptcnccdosnineansiensoanien

Reasons for Granting the Petition .............cccccsscesseeseeseereeees

!. By Summarily Affirming Without Explanation,

Courts of Appeals Insulate Their Decisions

PPM FOYER OY TIE CIE, nc ccsceesnsecnrsviccnssoconsesivescoiencs

Il. The Circuits Are Split Regarding the

. Permissibility of Summary Dispositions That

Provide No Explanation for the Rationale of the

ig NC NIE PIII ashes cecsegecetennesrspasceaglonpcbiclinmnchiietanacacactsede

A. The Federal, Second, Third, Fifth, and Eighth

Circuits permit appellate panels to issue

summary dispositions with no explanation of

Se PU niinccnccccticinincinis cnet cceciecmssebedbiciamedpiilenapians

B. The First, Fourth, Sixth, Seventh, Ninth,

Eleventh, and D.C. Circuits require panels to

provide at least some explanation of the

rationale for their decisions

PHC HTT HET HS HT HTHEE TOE OS SHEE HERES

IJ]. Summary Dispositions Impose a High Cost on the

Federal Judiciary. .............ssssssssesssseessssssssssssseneenserenssen 17

IV. This Court Should Require the Courts of Appeals

to Articulate at Least Some Rationale or

Explanation for Dispositions of Appeals Taken as

SB VARTIEE OT SIMGIIOTY FRIGIN ciissscscsicoscsseseanenadeestcetedesaseses as *

Conclusion

TABLE OF AUTHORITIES

Cases

Anastasoff v. United States, 223 F.3d 898 (8th Cir.

Ashe v. Corley, 992 F.2d 540 (Sth Cir. 1993) 00... eeessteeeeees 9

Ball Corp. v. Xidex Corp., 967 F.2d 1440 (10th Cir.

Brinkley v. Harbour Rec. Club, 180 F.3d 598 (4th

Cir. 1999)

Camarillo v. McCarthy, 998 F.2d 638 (9th Cir.

Conn. Board of Pardons v. Dumschat, 452 U.S. 458,

STE SEED sstsiecencuntvevnsiinseinacvinirancencblegniaainedonaentaa ee

Dickerson v. United States, 530 U.S. 428 (2000)

Frazier v. Heebe, 482 U.S. 641 (1987).........scscssseeseerersosees 5, 6

Harris v. Secretary, 126 F.3d 339 (D.C. Cir. 1997)

Hart v. Massanari, 266 F.3d 1155 (9th Cir. 2001)

In re Rules of the U.S. Ct. of Appeals for the Tenth

Cir., Adopted Nov. 18, 1986, 955 F.2d 36 (10th

Cir. 1992)

Information Sys. & Networks Corp. v. United States,

994 F.2d 972, 795 (Fed. Cir. 1993)

Kleinknecht v. Gettysburg College, 989 F.2d 1360

NN UN cs casaievadsciusccenaniaci susie seecaubaneiaicnieesiuasciaes 9

LeTulle v. Scofield, 308 U.S. 415, 416 (1940)

Moore, Owen, Thomas & Co. v. Coffey, 992 F.2d

Be Gls SIE iaetbtchvececsvsvenonecninnseinabasedbiedenratatesal 9

United States v. Forness, 125 F.2d 928 (2d Cir.

PIGUET isenissisiiecaviestdictpusinsindiipsiiciescaninnnsieipde tiaasalaninclsssianeniedaiuiis 18

Statutes and Court Rules

Fee cs eee wickets beciidennpdeseiesciensierniiiaioneslaiiaiiimauabibiacdeald 6

S. Cr. &. 10 bia oaseasca aisbdachiecltn davai iaeidealadtsiaapldaa tendo 10

Ri SG Be We io ssccirhcsinceesiisatesiccalpetnn da bianiapialiicadcntdaticeiaiaibiad 8

FE Saks. Wie SP hcksessascptninsicinnseisatanstipietdionimndeineuaumannmeneien 16

BEE: Hie PAE cicincbivikakstinhidsniiabiniscniiheshdaeanainnabasenimanadamanas 13

FEN, Wi Rl nctasicidibiabnnskdintimatiagunaimusioonmamaane 13

ATH CIR. R. Fetiotcin\shihimsbsiiniigticsnatsijuiensiapiaaceipusitanenmaiinieata vateieined 13,14

SOAs Ths BED cciccesibintisstoneennincioeeninaiibeinianeiniiageainads 11,12

TES Rs Bis ie sresaccnncivhinicsninnavccsovasueisenthnengedsicnmpiniaiantaaainietiiiadtin 16

URE EE Fis i iticccicectssnnsaiairiachinbaccpsabniiietapiibenmecnincays 11,12

FRE Ui i se csiniicisdisicdasoinemncninennimnmniaaiadioieniitan 15

DENTE is Fe cess sncisiececncicnicesicsesivnnctcertncinnininteionmmantain 14

PTE CR Te DUR seviniccsntscsnansctvepititecsiutiiniiiantoasiesamnaiaial j2

1 ith Cir. R. 36-1 (prior to Aug. 1, 2006) .......... cc eeeeeeees 16, 17

EE Mois Ws: I stiinccnsiniresiccuesialelies wbaieiaeapcabeneninbbaipnnmadibdian 15, 16

PI, CR Bis Sie vikisessinictsctctisionsnininnnitiannietcinnmagiaiatd 2,6

CED ivaceshencssichicontsickacciendeengiaieimebchiaientnninihennenpanve 8

Miscellaneous

Alvin Rubin, Bureaucratization of the Federal

Courts: The Tension Between Justice and

Efficiency, 55 NOTRE DAME L. REV. 648, 655

a csickichs tices svcescsicoeiccto oheheeidaesiaisossnteaedaphssiaaaaecaneeontoniaaaion 19

Vii

ABA COMMIS‘ = OF STANDARDS OF JUDICIAL

ADMINIS} iON, STANDARDS RELATING TO

APPELLATE COURTS (1977)

F. Coffin, THE WAYS OF A JUDGE: REFLECTIONS

FROM THE FEDERAL APPELLATE BENCH (1980)

COMMISSION ON REVISION OF THE FEDERAL COURT

APPELLATE SYSTEM, STRUCTURE AND

INTERNAL PROCEDURES: RECOMMENDATIONS

FOR CHANGE (1975)

Henry Friendly, Some Kind of Hearing, 123 U. PA.

L. REV. 1267 (1975)

Office of the Clerk, 10th Cir., Practitioners’ Guide

to the United States Court of Appeals for the

Tenth Circuit (1998)

William Reynolds & William Richman, The Non-

Precedential Precedent - Limited Publication

and No-Citation Rules in the United States

Courts of Appeals, 78 COLUM. L. REV. 1167

PHILIP SOPER, A THEORY OF LAW (1984)

Table of Proposed Revisions to the Eleventh Circuit

Rules (Apr. 3, 2006)

Patricia Wald, The Problem with the Courts: Black-

Robed Bureaucracy or Collegiality Under

Challenge, 42 MD. L. REV. 766 (1983)

No.

In the Supreme Court of the Gnited States

Ciry OF GETTYSBURG, SOUTH DAKOTA,

Petitioner,

UNITED STATES,

Respondent.

On Petition for a Writ of Certiorari

to the United States Court of Appeals

for the Federal Circuit

PETITION FOR A WRIT OF CERTIORARI

The City of Gettysburg, South Dakota, respectfully

petitions for a writ of certiorari to review the judgment of the

United States Court of Appeals for the Federal Circuit in this

case.

OPINIONS BELOW

The Federal Circuit did not issue an opinion in this case;

rather, it issued a “Notice of Entry of Judgment Without

Opinion,” which is reprinted at App. 1-2. The judgment of

the Federal Circuit is reprinted at App 3. The opinion of the

Court of Federal Claims is reported at 64 Fed. Cl. 429 and is

reprinted at App. 4-59.

JURISDICTION

The judgment of the Federal Circuit was entered on

March 16, 2006. Upon Petitioner’s application, Chief Justice

Roberts extended the time to file a-petition for certiorari until

August 13, 2006. Docket No. 05A1126. This Court has

jurisdiction under 28 U.S.C. § 1254(1).

RULE INVOLVED

Federal Circuit Rule 36, titled “Entry of Judgment —

Judgment Without Opinion” provides:

This court may enter a judgment of affirmance

without opinion, citing this rule, when it determines

that any of the following conditions exist and an

opinion would have no precedential value:

(a) the judgment, decision, or order of the trial court

appealed from is based on findings that are not clearly

erroneous;

(b) the evidence supporting the jury’s verdict is

sufficient;

verdict, or judgment on the pleadings;

(d) the decision of an administrative agency warrants

affirmance under the standard of review in the statute

authorizing the petition for review; or

(e) a judgment or decision has been entered without

an error of law.

STATEMENT OF THE CASE

Petitioner City of Gettysburg, South Dakota, is an

incorporated municipality located near the Oahe Reservoir on

the Missouri River. App. 5. In the 1970s, the City made

arrangements with the United States Army Corps of

Engineers, which owned or controlled the Reservoir, to

access the Reservoir as the City’s water supply. App. 5-11.

Under those arrangements, the City constructed and operated

water transmission equipment on Corps’ property. /d. The

City used this water system for approximately two decades.

From 1995 to 1997, the Corps’ operations severely

damaged the City’s water transmission equipment both on

and off the Corps’ property. The City was forced to seek an

alternative water source. App. 11-12.

In 2000, the City brought this action against the United

States in the Court of Federal Claims, alleging that the Corps’

severe damage to the City’s water system constituted a

“taking” of City property without just compensation in

violation of the Takings Clause of the Fifth Amendment to

the United States Constitution. App. 12.

The United States moved to dismiss for failure to state a

claim on the basis that the City lacked a cognizable property

interest protected by the Takings Clause, that the City’s claim

was barred by laches, and that the City’s claim was barred by

the terms of a release contained in an easement issued by the

Corps in 1978 to the City (“1978 Easement”). The City

argued -that it did not assent to the terms of the 1978

Easement, and that in any event, the release contained in the

1978 Easement did not encompass Takings claims. After the

close of discovery, the Court of Federal Claims sua sponte

requested additional briefing by the parties as to whether the

City was equitably estopped from contesting its assent to the

1978 Easement. App. 13. The United States had not pleaded

equitable estoppel as an affirmative defense. App. 41.

Treating the United States’ motion to dismiss as a motion

for summary judgment, App. 15, the Court of Federal Claims

held in a 24-page published opinion that the City had a

cognizable property interest in the water transmission

equipment; damaged by the Corps, App. 30, that the City’s

claim was not barred by laches, App. 34, and the City did not

assent to the 1978 Easement, App. 40. The Court of Federal

Claims also held, however, that the government’s failure to

plead equitable estoppel in its initial pleading did not waive

the defense under Rule of the United States Court of Federal

Claims (“RCFC”) &(c), App. 41-43, that the City was

equitably estopped from contesting its assent to the 1978

Easement,. App. 43-47, and that the release in the 1978

Easement barred the City’s claims as to the City’s water

transmission equipment located both on and off the Corps’

property, App. 47-48. Accordingly, the Court of Federal

Claims entered judgment for the United States. App. 59.

The City appealed to the Federal Circuit, where the case

was fully briefed, including participation by an amicus, and

was subject to extended argument on March 6, 2006. In its

brief, the United States defended the summary judgment

below on the grounds articulated by the Court of Federal

Claims, as well as the alternative basis that the City had

assented in fact to the 1978 Easement, see Answering Brief

of the United States Appellee at 26-31 — an argument that the

Court of Federal Claims had expressly rejected. See App. 46

(“proof of [the City’s] intent [to assent to the 1978 Eastment|

... is lacking here”).

On March 16, 2006, the Federal Circuit issued a notice of

affirmance without opinion. App. 1-2. The Court’s

judgment stated: “This CAUSE having been heard and

considered, it is ORDERED and ADJUDGED: AFFIRMED.

See Fed. Cir. R. 36.” App. 3.

REASONS FOR GRANTING THE PETITION

In this case, the Federal Circuit affirmed the judgment of

the Court of Federal Claims without opinion. The Federal

Circuit offered only a single word: “Affirmed.” App. 3.

The Federal Circuit provid d no explanation for its

affirmance and thereby insulated its decision. from this

Court’s review, because there is no basis on which to assess

whether the merits of this case implicate a split among the

circuits on an important question of federal law.

The Federai Circuit’s action was a product of a circuit

rule permitting summary affirmance without any explanation.

Six circuits have adopted such rules. Although the other

seven circuits have adopted rules to the contrary, requiring at

least some explanation, and although the practice of issuing

summary dispositions that offer no guidance as to.a court of

appeals’ rationale has been criticized harshly by Justices of

this Court, other federal judges, and leading scholars and

members of the Bar, the harmful practice continues. This

Court should decide whether it should exercise its

supervisory power to require federal courts of appeals to

provide at least a minimal explanation of their decisions. See

Dickerson v. United States, 530 U.S. 428, 437 (2000) (“The

law in this area is clear. This Court has supervisory authority

over the federal courts, and we may use that authority to

prescribe rules of evidence and procedure that are binding in

those tribunals.’’).

This Court has recognized that a federal court “has

discretion to adopt local rules that are necessary to carry out

the conduct of its business.” Frazier v. Heebe, 482 U.S. 641,

645 (1987). A court’s “discretion in promulgating local rules

is not, however, without limits. This Court may exercise its

inherent supervisory power to ensure that these local rules are

consistent with ‘the principles of right and justice.’” Jd.

(quoting /n re Ruffalo, 390 U.S. 544, 554 (1968) (White, J.,

concurring)).' In this case, as in Frazier, the Federal

Circuit’s rule is inconsistent with the principles of justice and

American legal tradition, so this Court’s review is necessary.

I. By Summarily Affirming Without Explanation,

Courts of Appeals Insulate Their Decisions From

Review by This Court.

Federal Circuit Rule 36 permits the Federal Circuit to

summarily affirm a trial court’s ruling without opinion. The

rule may be invoked for any of several reasons, but the panel

is not required to identify which of those reasons is the basis

of the affirmance. Moreover, all of the reasons are so general

and all-encompassing as to be useless. For example, the

Federal Circuit may summarily affirm if “a judgment or

decision has been entered without an error of law.” FED. CIR.

R. 36(e). In other words, if an appellant argues that the trial

court committed legal error, and the Federal Circuit

determines that the trial court did not commit legal error, the

Federal Circuit may summarily affirm that decision without

opinion. Similarly, if the trial court grants summary

judgment, and the losing party appeals, the Federal Circuit

may summarily affirm if it believes that “the record supports

summary judgment.” /d. 36(c). The Federal Circuit may

summarily affirm the decision of an administrative agency if

the decision “wagrants affirmance under the standard of

review in the stat ne authorizing the petition for review.” Jd.

36(d). In short, under Federal Circuit Rule 36, if affirmance

' See also 28 U.S.C. § 2072(a) (“The Supreme Court shall have

the power to prescribe general rules of practice and procedure and

rules of evidence for cases in the United States district courts

(including proceedings before magistrates thereof) and courts of

appeals.”).

is warranted, then summary affirmance is warranted. No

_ other standard must be satisfied.

Thus, as in this case, when an Appellee defends a trial

court summary judgment on the alternative basis of an

argument that the trial court rejected, the losing Appellant

has no way of knowing whether the Federal Circuit approved

the trial court’s rationale for summary judgment, or whether

the Federal Circuit accepted the Appellee’s alternative

argument to sustain the summary judgment. Federal Circuit

Rule 36(c) provides that the trial court decision may be

summarily affirmed when “the record supports summary

judgment, directed verdict, or judgment on the pleadings.”

Under Federal Circuit Rule 36(c), it is impossible to know

the grounds upon which the Federal Court sustained the

summary judgment ruling in this case.

Critically, by summarily affirming the trial court under

Federal Circuit Rule 36, the Federal Circuit does not adopt

the trial court decision as its own. If it did, the Federal

Circuit decision would be subject to the scrutiny of this

Court. In evaluating a petition for certiorari, this Court could

determine why the Federal Circuit ruled as it did, whether the

Federal Circuit decision conflicts with the opinions of other

courts of appeals, and whether the case poses an important

question that might warrant review. As matters now stand in

this case, however, Petitioners cannot state whether the

Federal Circuit decision conflicts with the holding of other

circuits, or whether the merits of the case pose an important

question, because the grounds for the Federal Circuit’s

decision are unknown.

The nature of the arguments advanced by the parties on

appeal in this case illustrates how Federal Circuit Rule 36 and

similar rules in several other circuits effectively insulate

courts of appeals’ summary dispositions from this Court's

review. The Court of Federal Claims entered judgment for

the United States because it held that the City was equitably

estopped from contesting applicability of the 1978

Easement.’ The United States, however, had failed to assert

equitable estoppel in its initial responsive pleading as

required by RCFC 8(c);> the court raised the equitable

_estoppel issue sua sponte. The Court of Federal Claims held

that failure to plead an affirmative defense does not

automatically extinguish the defense under RCFC 8(c), and

that the defense can be later revived absent any prejudice.

See App. 41-43.

If, in affirming the judgment of the Court of Federal

Claims, the Federal Circuit had expressly endorsed this

proposition, it would have taken sides in a long-standing

circuit split. The D.C. Circuit and the Fifth Circuit hold that

an affirmative defense enumerated by Federal Rule of Civil

Procedure 8(c)' is waived, and cannot (as here) be later raised

? The Court of Federal Claims held as a factual matter that that

the City did not actually assent to the 1978 Easement (and thus that

document’s release provision). See App. 47 (“proof {of the City’s]

intent [to agree to the Easement] is lacking here”).

* RCFC 8(c) provides:

Affirmative Defenses. In pleading to a preceding pleading,

a party shall set forth affirmatively accord and satisfaction,

arbitration and award, assumption of risk, contributory

negligence, discharge in bankruptcy, duress, estoppel,

failure of consideration, fraud, illegality, injury by fellow

servant, laches, license, payment, release, res judicata,

statute of frauds, statute of limitations, waiver, and any

other matter constituting an avoidance or affirmative

defehse. When a party has mistakenly designated a defense

as a counterclaim or a counterclaim as a defense, the court

on terms, if justice so requires, shall treat the pleading as if

there had been a proper designation.

' Federal Rule of Civil Procedure 8(c) is identical to RCFC

8(c). which is reprinted in note 4, supra. See FED. R. Civ. P. 8(c).

Oe Ee ee eee a

by dispositive motion, even in the. absence of prejudice. See

Harris v. Secretary, 126 F.3d 339, 343 (D.C. Cir. 1997) (“it

is well settled that a party’s failure to plead an affirmative

defense .. . generally results in waiver of that defense and its

exclusion from the case”); Ashe v. Corley, 992 F.2d 540, 545

n.7 (Sth Cir. 1993) (rejecting an argument on statute of

limitations in a summary judgment motion because the

defense had not been pled in the answer).

Meanwhile, as the D.C. Circuit acknowledged in Harris,

several other circuits follow the contrary approach taken by

the Court of Federal Claims and hold that “absent unfair

Surprise or prejudice to the plaintiff, a defendant's affirmative

defense is not waived when it is first raised in a pre-trial

dispositive motion.” Brinkley v. Harbour Rec. Club, 180 F.3d

598, 612 (4th Cir. 1999) (rejecting the D.C. and Fifth Circuit

view); see also Blaney v. United States, 34 F.3d 509, 512 (7th

Cir. 1994) (stating that an unpleaded untimeliness defense

could be raised in motion to dismiss); Camarillo v.

McCarthy, 998 F.2d 638, 639 (9th Cir. 1993) (holding that an

affirmative defense may be raised at summary judgment

absent prejudice to opposing party); Moore, Owen, Thomas

& Co. v. Coffey, 992 F.2d 1439, 1445 (6th Cir. 1993)

(asserting that an affirmative defense may be raised in

response to summary judgment motion); Kleinknecht v.

Gettysburg College, 989 F.2d 1360, 1374 (3d Cir. 1993)

(noting that an affirmative defense may be raised at summary

judgment absent prejudice); Ball Corp. v. Xidex Corp., 967

F.2d 1440, 1443-44 (10th Cir. 1992) (raising affirmative

defense in summary judgment motion preserved defense for

trial three months later). Such a circuit split on an important

The Federal Circuit accords identica! provisions of the Rules of the

Court of Federal Claims and the r «ral Rules of Civil Procedure

the same interpretation. See, e.g., mwormation Sys. & Networks

Corp. v. United States, 994 F.2d 792, 795 (Fed. Cir. 1993).

issue of federal law is the stuff of which successful petitions

are made. See S. Cr. R. 10(a).

On the other hand, the United States also defended the

judgment of the Court of Federal Claims on the alternative

ground that the City had assented to the 1978 Easement as a

matter of fact, see Answering Brief of the United States

Appellee at 26-31, even though the Court of Federal Claims

rejected that argument. See App. 40. If the Federal Circuit

agreed with the government’s alternative argument -and

affirmed on that basis, the Federal Circuit’s decision rests on

a factual determination not ordinarily reviewed by this Court.

See S. CT. R. 10 (“A petition for a writ of certiorari is rarely

granted when the asserted error consists of erroneous factual

findings.”)? ;

It is also possible that the Federal Circuit affirmed the

judgment of the Court of Federal Claims based on a theory :

that was never briefed before it or in the trial court. Such an

action could itself warrant review by this Court. See, e.g.,

LeTulle v. Scofield, 308 U.S. 415, 416 (1940) (“We took this

case because the petition for certiorari alleged that the Circuit

Court of Appeals had based its decision on a point not.

presented or argued by the litigants, which the petitioner had

never had an opportunity to meet by the production of

evidence.”).

Ultimately, there is no way to know what rationale

supports the Federal Circuit’s decision. Whether the Federal

Circuit agreed with the legal principle expressed in the Court

of Federal Claims’ opinion (the United States’ failure to

plead the affirmative defense of equitable estoppel did not

result in waiver of that defense under RCFC 8(c), and the

City was indeed equitably estopped from contesting

application of the 1978 Easement), or the alternative factual

argument advanced by the United States (the City agreed to

the 1978 Easement), or affirmed for novel reasons all its own

: 11

can be the subject only of speculation. Thus, given this

Court’s rules regarding the grounds for granting the writ of

certiorari, the Federal Circuit has effectively denied this

Court the opportunity to review the decision in this case.

li. The Circuits Are Split Regarding the Permissibility of

“Summary Dispositions That Provide No Explanation

for the Rationale of the Court of Appeals.

The Federal Circuit is joined by five other circuits in

placing its decisions beyond the review of this Court. The

other seven circuits, however, have rules which prevent an

appellate panel from rendering a decision without providing

at least some guidance as to the reasoning for the decision.

The result is a lack of uniformity among the circuits; some

promulgate decisions whose suitability for review by this

Court can be ascertained, while others, like the Federal

Circuit in this case, have effectively rendered themselves

courts of last resort.

A. The Federal, Second, Third, Fifth, and Eighth

Circuits permit appellate panels to issue summary

dispositions with no explanation of their reasoning.

Federal Rule Circuit 36 allows the Federal Circuit to

summarily affirm any trial court opinion in any case, no

matter how meritorious, for any reason, without providing

any guidance as to its rationale or citation to any authority

beyond the rule itself. The Fifth Circuit and the Eighth

Circuit have adopted materially identical rules. See STH Cir.

R. 47.6; 8TH Cir. R. 47B.°

> Fifth Circuit Rule 47.6 provides: “The judgment or order

appealed may be affirmed or enforced without opinion when the

court determines that an opinion would have no precedential value

and that any one or more of the following circumstances exists and

is dispositive of a matter submitted for decision: (1) that a

In the Tenth Circuit, a panel “need not write an extensive

disposition in every appeal but may, in its discretion, use a

terse judgment such as the one word ‘affirmed.’” Office of

the Clerk, 10th Cir., Practitioners’ Guide to the United States

Court of Appeals for the Tenth Circuit (1998). This may be

done even in cases deemed by the court to be important. See

10rH Cir. R. 36.1 (“The court does not write opinions in

every case. The court may dispose of an appeal or petition

without written opinion. Discussion without opinion does not

mean that the case is unimportant. \t means that the case

does not require application of new points of law that would

make the decision a valuable precedent.”) (emphasis added).

It is the Tenth Circuit litigant’s misfortune that this Court

might wish to review a decision on a question of law even if

the decision does not announce new doctrine — if, for

judgment of the district court is based on findings of fact that are

not clearly erroneous; (2) that the evidence in support of a jury

verdict is not insufficient; (3) that the order of an administrative

agency is supported by substantial evidence onthe record as a

whole; (4) in the case of a summary judgment, that no genuine

issue of material fact has been properly raised by the appellant; and

(5) no reversible error of law appears. In such case, the court may,

in its discretion enter either of the following orders: ‘AFFIRMED.

See STH Cir. R. 47.6.” or “ENFORCED. See Sti CIR. R. 47.6.”

° Eighth Circuit Rule 47B provides: “The judgment or order

appealed may be affirmed or enforced without opinion if the court

determines that an opinion would have no precedential value and

that any of the following circumstances disposes of the matter

submitted for decision: (1) a judgment of the district court is based

on findings of fact that are not clearly erroneous; (2) the evidence

in support of a jury verdict is not insufficient; (3) the order of an

administrative agency is supported by substantial evidence on the

record as a whole; (4) no error of law appears. The court in its

discretion, with or without further explanation, may enter either of

the following orders: ‘AFFIRMED. See 8TH Cik. R. 47B.” or

“ENFORCED. See 8T1U CIR. R. 47B.””

example, another circuit has reached a conclusion contrary to

the law. of the Tenth Circuit after the Tenth Circuit’s

announcement of its doctrine but before the doctrine’s rote

application in the litigant’s case. The Tenth Circuit’s practice

of summary disposition nullifies the possibility of such a

review.

The Second and Third Circuits at least encourage panels

to provide explanations of their actions, but the rules are not

mandatory. In the Second Circuit, when a case is resolved by

summary decision, the panel may, but is not required to,

provide an explanation for its decision. See 2D Cir. R. 0.23

(Accordingly, in those cases in which decision is unanimous

and each judge of the panel believes that no jurisprudential

purpose would be served by a written opinion, disposition

with be made... by summary order. Where disposition is by

summary order, the court may append a brief written

Statement to that order.”) (emphasis added). The Third

Circuit’s rule is similarly permissive. See 3b Cir. R. 6.3.2

(“A: judgment order may state that the case is affirmed by

reference to the opinion of the district court or decision of the

administrative agency and may contain one or more

references to cases or other authorities.”) (emphasis added).

Thus, while the Second and Third Circuit rules suggest that

an explanation is desirable, in substance, they are no different

from the Federal, Fifth, Eighth, and Tenth Circuit rules; the

court of appeals still may summarily affirm a trial court

ruling while providing no explanation and thereby shielding

its decision from review by this Court.

B. The First, Fourth, Sixth, Seventh, Ninth, Eleventh,

and D.C. Circuits require panels to provide at least

some explanation of the rationale for their decisions.

In the other circuits, the rule is the opposite. The Fourth

Circuit allows for summary decisions, but such a decision

must “set forth .. . the reason or reasons therefor.” 4TH CIR.

R. 36.3.’ The Ninth Circuit, which is by far the largest, most

over-burdened circuit and which must wade through the

largest number of appeals, nevertheless in every case

“provide[s] the parties and the district court with a concise

explanation of [the] court’s decision.” 9TH Cir. R. 4.3.a.°

Ninth Circuit Rule 4.3.a requires a recitation of “information

crucial to the result,” which includes the decisive facts and

citation to relevant precedent. /d. Thus, in the Fourth and

Ninth Circuits, a litigant (and this Court) would always know

whether the court of appeals’ decision conflicts with those of

other circuits or state courts of last resort, and whether the

question on which the decision turned is of exceptional

importance.

” Fourth Circuit Rule 36.3 provides: “If all judges on a panel

of the Court agree following oral argument that an opinion in a

case would have no precedential value, and that summary

disposition is otherwise appropriate, the Court may decide the

appeal by summary opinion. A summary opinion identifies the

decision appealed from, sets forth the Court’s decision and the

reason or reasons therefore, and resolves any outstanding motions

in the case. It does not discuss the facts or elaborate on the Court’s

reasoning.”

® Ninth Circuit Rule 4.3.a provides: “A memorandum

disposition cannot be cited as precedent. Unlike an opinion for

publication, which is designed to clarify the law of the circuit, a

memorandum disposition is designed only to provide the parties

and the district court with a concise explanation of this court’s

decision. Because the parties and the district court are aware of the

facts, procedural events and applicable law underlying the dispute,

the disposition need recite only such information crucial to the

result. Accordingly, all that is necessary is a statement such as the

following: Defendant’s statements were volunteered rather than

made in response to police questioning, and were therefore

admissible. United States v. Cornejo, 598 F.2d 554, 557 (9th Cir.

1979). AFFIRMED.”

® Even Judge Kozinski, an ardent defender of the practice of

issuing non-precedential decisions, maintains that a non-

‘

ee ee ee

Similarly, the Seventh Circuit allows cases to be decided

either by opinion or by order; opinions are to be published,

and orders are to be unpublished. 71H Cir. R. 53(b).'° In the

instance of an unpublished order, the panel must state the

reasons for the judgment, either in the order itself or orally

from the bench. Jd. 53(c)(2).'' Thus, in every case, the

litigant knows the rationale behind a judgment of the Seventh

Circuit.

Likewise, the D.C. Circuit permits “abbreviated

dispositions,” but it expressly requires that the disposition

contain “a notation of precedents” or be “accompanied by a

brief memorandum. See D.C. Cir. R. 36(b).'7

precedential disposition should contain an explanation for the

result, however brief. See Hart v. Massanari, 266 F.3d 1155, 1178

| (9th Cir. 2001) (“An unpublished disposition is, more or less, a

letter from the court to the parties familiar with the facts,

| announcing the result and the essential rationale of the court’s

decision.” (emphasis added).

'° Seventh Circuit Rule 53(b) provides: “The court may

dispose of an appeal by an order or by an opinion, which may be

signed or per curiam. Orders shall not be published and opinions

shall be published.”

'' Seventh Circuit Rule 53(c)\(2) provides: “When the decision

does not satisfy the criteria for publication, as stated above, it will

be filed as an unpublished order. The order will ordinarily contain

reasons for the judgment, but may not do so if the court has

announced its decision and reasons from the bench. A statement of

facts may be omitted from the order or may not be complete-or

detailed.”

' D.C. Circuit Rule 36(b) provides: “The court may, while

according full consideration to the issues, dispense with published

Opinions where the issues occasion no need therefor, and confine

its action to such abbreviated disposition as it may deem

appropriate, e.g., affirmance by order of a decision or judgment of

The First Circuit’s rules indicate that its summary

decisions reveal the basis of the reasoning applied. See ST

Cir. R. 36 (“An opinion is used when the decision calls for

more than a summary explanation.”) (emphasis added). The

Sixth Circuit’s rules, which allow for dispositions from the

bench, contemplate that judges will state the reasons for their

rulings. See 6TH CiR. R. 36."

Until recently, the Eleventh Circuit permitted affirmances

without opinion. Eleventh Circuit Rule 36-1 was

substantially the same as Federal Circuit Rule 36. See 11th

Cir. R. 36-1 (prior to Aug. 1, 2006).'* However, the Eleventh

;

a court or administrative agency, a judgment or affirmance or

reversal, containing a notation of precedents or accompanied by a

brief memorandum. If the parties have agreed to such disposition,

they may so state in their briefs or stipulate at any time prior to

decision. In any such case the court will promptly state in their

briefs or may so stipulate at any time prior to decision. In any such

case the court will promptly issue a judgment unless compelling

reasons dictate otherwise.”

'3 Sixth Circuit Rule 36 provides: “In those cases in which the

decision in unanimous and each judge of the panel believes that no

jurisprudential purpose would be served by a written opinion,

disposition of the case may be made in open court following oral

argument. A written judgment shall be signed and entered by the

clerk in accordance with the decision of the panel from the bench.

Counsel may obtain from the clerk a copy of the transcript of the

decision as it was announced from the bench.”

'4 Before August 1, 2006, Eleventh Circuit Rule 36-1 provided:

“Affirmance Without Opinion. When the Court determines that

any of the following circumstances exist: (a) the judgment of the

district court is based on findings of fact that are not clearly

erroneous: (b) the evidence in support of a jury verdict is

sufficient; (c) the order of an administrative agency is supported by

substantial evidence on the record as a whole; (c) the summary

judgment, directed verdict, or judgment on the pleadings is

Circuit rescinded that rule, effective August 1, 2006. In

proposing the elimination of the rule, the Eleventh Circuit

stated: “The rule is proposed to be rescinded, since only a

miniscule portion of appeals are currently terminated in this

manner.” Table of Proposed Revisions to the Eleventh

Circuit Rules (Apr. 3, 2006) at 2. Thus, the Eleventh Circuit

no longer permits its panels to do what the Federal Circuit

has done in this case.

The circuits, therefore, are split. This lack of uniformity

results from the conflicting opinions of the judges of different

circuits. This split among circuit rules is functionally no

different from a split among circuit case holdings. In cach

instance, the result of litigation in federal court may be

determined by the circuit in which suit happens to be filed.

This Court should resolve the split.

Il. Summary Dispositions Impose a High Cost on the

Federal Judiciary.

The use by the courts of appeals of summary dispositions

that provide only a result, with no attempt to provide the

rationale supporting the court’s decision, has been subject to

sustained criticism from both academic writers and justices

and circuit court judges themselves. The most obvious

objection to this practice is that it removes one of the more

effective devices to ensure the accuracy of the court’s

decision. As noted by Judge Coffin,

[a] remarkably effective device for detecting fissures

in accuracy and logic is the reduction to writing of the

results of one’s thought processes. ... Somehow, a

supported by the record; (e) the judgment has been entered without

a reversible error of law; and an opinion would have no

precedential value, the judgment or order may be affirmed or

enforced without opinion.”

decision mulled over in one’s head or talked about in

conference looks different when dressed up in written

words and sent out into the sunlight. ... [W]e may

be in the very middle of an opinion, struggling to

reflect the reasoning “all judges have agreed on, only

to realize that it simply “won’t write.” The act of

writing tells us what was wrong with the act of

thinking.

F. Coffin, THE WAYS OF A JUDGE: REFLECTIONS FROM THE

FEDERAL APPELLATE BENCH 57 (1980); see also Henry

Friendly, Some Kind of Hearing, 123 U. PA. L. Rev. 1267,

1292 (1975) (“The necessity for justification is a powerful

preventive of wrong decisions.”); cf United States vy.

Forness, 125 F.2d 928, 942 (2d Cir. 1942) (Frank, J.) (“[A]s

every judge knows, to set down in precise words the facts as

he finds them is the best way to avoid carelessness in the

discharge of that duty: Often a strong impression that. . . the

facts are thus-and-so gives way when it comes to expressing

that impression on paper.”).

The summary disposition also removes what has “always

been understood to be the principal constraint on judges: the

obligation to reach decisions that are justified by the law and

not simply the judge’s personal preference for how a case

should be resolved.” See generally PHILIP SOPER, A THEORY

or LAW I11 (1984). As noted by the principal academic

commentators in this area, “[a] key characteristic of decisions

without opinions is their failure to provide the parties or the

court below with any hint as to the court’s reasoning.

Accordingly, the practice under these rules has been

uniformly condemned by commentators, lawyers, and

judges.” William Reynolds & William Richman, The Non-

Precedential Precedent - Limited Publication and No-

Citation Rules in the United States Courts of Appeals, 78

CoLuM. L. REV. 1167, 1174 (1978) (footnotes omitted).

“Uniformly condemned” may be hyperbole, but not by

much. Directly or implicitly, judges, lawyers, and academic

commentators have indeed consistently attacked the basic

premises underlying the use by the circuit courts of summary

orders to decide appeals.

Unlike a baseball umpire, a judge must give reasons. This

is central to the tradition of western jurisprudence. The

outcome and consequences are not sufficient to tell whether a

decision is a good one; one must know the reasons given.

Individual justices and circuit court judges have with some

frequency noted the importance of reasoned opinions to

support appellate decisions. Justice Stevens wrote:

The judges {in former times] were guided by few

written laws, but developed a meaningful set of rules

by the process of case-by-case adjudication. Their

explanations of why they decided cases as they did

provided guideposts for future decisions and an

assurance to litigants that like cases were being

decided in a similar way. Many of us believe that

those statements of reasons provided a_ better

guarantee of justice than could possibly have been

described in a code written in sufficient detail to be fit

for Napoleon.

Conn. Board of Pardons v. Dumschat, 452 U.S. 458, 472

(1981) (Stevens, J., dissenting).

Judge Patricia Wald of the D.C. Circuit has reached the

same conclusion. “My own guiding principle is that virtually

every appellate decision requires some statement of reasons.

The discipline of writing even a few sentences or paragraphs

explaining the basis for the judgment insures a level of

thought and scrutiny by the court that a bare signal of

affirmance, dismissal, or reversal does not.” Patricia Wald,

The Problem with the Courts: Black-Robed Bureaucracy or

Collegiality Under Challenge, 42 MD. L. Rev. 766, 782

(1983) (emphasis added).

Judge Holloway of the Tenth Circuit has agreed:

[T]he basic purpose for stating reasons within an

opinion or order must never be forgotten — that the

decision must be able to withstand the scrutiny of

analysis, against the record evidence, as to soundness

under the Constitution and the statutory and

decisional law we must follow, as to its consistency

with our precedents. Our orders and judgments, like

our published opinions, should never be shielded from

searching examination.

In re Rules of the U.S. Ct. of Appeals for the Tenth Cir.,

Adopted Nov. 18, 1986, 955 F.2d 36, 38 (10th Cir. 1992)

(Holloway, C.J., dissenting).

The late Judge Rubin of the Fifth Circuit reached the

same conclusion:

Every judge should be required to give his reasons for

a decision, and those reasons should be sufficient to

explain the result to the litigants but also to enable

other litigants to comprehend its precedential value

and limits to its authority.

Alvin Rubin, Bureaucratization of the Federal Courts: The

Tension Between Justice and Efficiency, 55 NOTRE DAME L.

REV. 648, 655 (1980).

The Bar has been careful to distinguish between the use

of nonpublished opinions, as to which reasonable persons

may disagree, and the use of decisions containing no

statement of the circuit court’s rationale, which has been

consistently opposed. As the American Bar Association

Commission of Standards of Judicial Administration wrote:

’

Every decision should be supported, at minimum, by a

citation of the authority or statement of grounds upon

which it is based. When the lower court decision was

based on a written opinion that adequately expresses

the appellate court’s view of the law, the reviewing

court should incorporate that opinion or such portions

of it as are deemed pertinent, or, if it has been

published, affirm on the basis of that opinion.

ABA COMMISSION OF STANDARDS~ OF - JUDICIAL

ADMINISTRATION, STANDARDS RELATING TO APPELLATE

Courts 58 (1977). Another Commission declared:

We recommend that in every case there be some

record, however brief, and whatever the form, of the

reasoning which impelled the decision. Opinions can

be signed or unsigned, published or unpublished, but

in each case the litigants and their attorneys would be

apprised of the reasoning which underlies the

conclusion of the court.

COMMISSION ON REVISION OF THE FEDERAL COURT

APPELLATE SYSTEM, STRUCTURE AND INTERNAL

PROCEDURES: RECOMMENDATIONS FOR CHANGE 50 (1975).

Whether to permit the issuance of summary dispositions,

practiced by six judicial circuits, but prohibited by seven

others and condemned by leading members of the judiciary

and the Bar as unwise and contrary to American notions of

justice, is a question this Court should resolve.

IV. This Court Should Require the Courts of Appeals to

Articulate at Least Some Rationale or Explanation

for Dispositions of Appeals. Taken as a Matter of

Statutory Right.

To be clear, Petitioner here is not asking that this Court

hold that the Federal Circuit was required to have issued a

full-blown, comprehensive opinion. Nor is Petitioner asking

this Court to address the question of whether all decisions of

the federal courts of appeals are entitled to precedential

effect. Compare Anastasoff v. United States, 223 F.3d 898,

904 (8th Cir.), vacated as moot, 235 F.3d 1054 (8th Cir.

2000) (holding that the Constitution forbids the practice of

non-precedential opinions) with Hart v. Massanari, 266 F.3d

1155 (9th Cir. 2001) (holding that non-precedential

dispositions are constitutional). Instead, Petitioner only asks

that the Federal Circuit be required to articulate, however

briefly, the grounds of its decision sufficiently to allow the

parties to understand the basis of the decision and to allow

this Court to determine whether to exercise its certiorari

review over that decision. _

In this case, the Federal Circuit could have said as little

as, “We agree with the grounds upon which the trial court

entered summary judgment,” or “we agree with the United

States there is no genuine issue of material fact that the City

assented to the terms of the 1978 Release, and that Release

bars the City’s claims.” Either such rationale would have

explained to the parties the basis of the Federal Circuit’s

decision, and would allow this Court to determine whether to

review that decision. The basis of the Federal Circuit’s

decision, however, is impenetrable to the parties and this

Court. This case, therefore, calls for the exercise of this

Court’s supervisory authority to require courts of appeals to

at least briefly articulate the essential rationale of their

dispositions, whether precedential or otherwise, in appeals

taken as a matter of statutory right.

CONCLUSION

For the foregoing reasons, the petition for a writ of

certiorari should be granted.

Respectfully submitted,

M. Miller Baker

Counsel of Record

Michael S. Nadel

Jeffrey W. Mikoni

McDERMOTT WILL & EMERY LLP

600 Thirteenth Street, N.W.

Washington, D.C. 20005

(202) 756-8000

Attorneys for Petitioner

City of Gettysburg, South Dakota

August 14, 2006

App. !

UNITED STATES COURT OF APPEALS FOR THE

FEDERAL CIRCUIT

NOTICE OF ENTRY OF

JUDGMENT WITHOUT OPINION

JUDGMENT ENTERED: 03/16/06

The judgment of the court in your case was entered today

pursuant to Rule 36. This Court affirmed the judgment or

decision that was appealed. None of the relief sought in the

appeal was granted. No opinion accompanied the judgment.

The mandate will be issued in due course.

Information is also provided about petitions for rehearing

and suggestions for rehearing en banc. The questions and

answers are those frequently asked“ and answered by the

Clerk’s Office.

Costs are taxed against the Petitioner(s) in favor of the

Respondent(s) under Rule 39. The party entitled to costs is

provided a bill of costs form and an instruction sheet with

this notice.

The parties are encouraged to stipulate to the costs. A bill

of costs will be presumed correct in the absence of a timely

filed objection.

Costs are nayable to the party awarded its costs. If costs

are awarded . the government, they should be paid to the

Treasurer of the United States. Where costs are awarded

against the government, payment should be made to the

person(s) designated under the governing statutes, the court’s

orders, and the parties’ written settlement agreements. In

cases between private parties, payment should be made to

counsel for the party awarded costs or, if the party is not

represented by counsel, to the party pro se. Payment of costs

App. 2

should not be sent to the court. Costs should be paid

_ promptly.

Regarding exhibits and visual aids: Your attention is

directed to FRAP 34(g) which states that the clerk may

destroy or dispose of the exhibits if counsel does not reclaim

them within a reasonable time after the clerk gives notice to

remove them. (The clerk deems a reasonable time to be 15

days from the date the final mandate is issued.)

JAN HORBALY

Clerk

App. 3

NOTE: Pursuant to Fed. Cir. R. 47.6, this disposition is not

citable as precedent. It is a public record.

UNITED STATES COURT OF APPEALS

FOR THE FEDERAL CIRCUIT

CITY OF GETTYSBURG, SOUTH DAKOTA,

Plaintiff-Appellant,

¥.

UNITED STATES,

Defendant-Appellee.

No. 05-5120

173 Fed. Appx. 827

March 16, 2006

Newman, Bryson, and Prost, Circuit Judges:

This CAUSE having been heard and considered, it is

ORDERED and ADJUDGED: AFFIRMED. See Fed. Cir. R.

Per Curiam.

App. 4

UNITED STATES COURT OF FEDERAL CLAIMS

CITY OF GETTYSBURG, SOUTH DAKOTA,

Plaintiff-Appellant,

Vv.

UNITED STATES,

Defendant-Appellee.

No. 00-773 L

64 Fed. Cl. 429

March 16, 2005

Lynn J. Bush, Judge.

This takings case is currently before the court on

defendant’s Motion To Dismiss Complaint For Failure To

State A Claim Or In The Alternative For Summary Judgment

And Memorandum In Support Thereof. For the reasons set

forth herein, defendant’s Motion For Summary Judgment is

hereby granted.

App. 5

BACKGROUND

I. Factual Background

Plaintiff, the City of Gettysburg, South Dakota, is an

incorporated municipality located in Potter County (City).

The City is approximately sixteen miles east of the Oahe

Reservoir located on the Missouri River (Reservoir). In the

1960’s, the City obtained its water from two wells located

within the City. However, in the mid-1960’s, the. City began

to look for alternative water sources because of the poor

quality of the wells and the high costs of maintaining them.

Consequently, in the early 1970’s, the City explored the

possibility of constructing a system to transport water from

the Reservoir to the City. The Reservoir was formed by the

creation of the Oahe Dam, as authorized by the Flood Control

Act of 1944, Pub. L. No. 534, 58 Stat. 887 (1944) (codified

as amended in scattered sections of 33 U.S.C. §§ 701-1, et

seq.), to serve the purpose of flood control and navigation.’

' The creation of the Oahe Dam and the Oahe Reservoir was a

result of severe floods that had devastated the lower Missouri

River Basin in 1943 and 1944. See Etsi Pipeline Project v.

Missouri, 484 U.S. 495,-500, 98 L. Ed. 2d 898, 108 S. Ct. 805

(1988). At the behest of Congress, the United States Army Corps

of Engineers (Corps) prepared a report that described a

comprehensive plan to develop the entire basin, known as the Pick

Plan for its author, a colonel in the Corps. /d. The Pick Plan pro-

posed the construction of twelve multi-purpose reservoirs, which

included the creation of the Oahe Reservoir. The Pick Plan

stressed flood control as the primary objective, but also stated that

the project would aid with irrigation, navigation, power, domestic

and sanitary purposes, wildlife, and recreation. /d. (citing H.R.

Doc. No. 475, 78th Cong., 2d Sess., at 29 (1944)). The report

estimated the gross storage capacity of the Oahe Reservoir at about

six million acre-feet of water. At the same time, the Interior De-

partment’s Bureau of Reclamation independently completed its

own plan to develop the basin, known as the Sloan Plan. /d. at

(continued...)

App. 6

According to plaintiff, the United States Army Corps of

Engineers (Corps) owns or controls the Reservoii up to the

Corps’ property line located at an elevation of approximately

1680 feet up the Reservoir slope.

Thus, in October 1972, an_ engineering firm

recommended that the City construct a water transmission

system from the Reservoir to the City and that the City begin

with the project as soon as possible because of problems

being experienced with the existing water system. The

proposed project included an intake structure exiting the

Reservoir to a pumphouse on the east bank of the Reservoir,

an underground transmission pipeline running east

approximately two miles from the pumphouse to a water

treatment facility, and an underground transmission pipeline

running approximately fourteen miles from the treatment

facility to the City. The intake structure, the pumphouse, and

500. Because Congress could not proceed with both plans at once,

a committee was composed with representatives from both the

Corps and the Bureau of Reclamation. /d. at 501. The committee

proposed a plan that incorporated aspects from both the Pick Plan

and the Sloan Plan. /d. The Oahe Reservoir was to be created by

construction of a high dam and to have a gross storage capacity of

nineteen million acre-feet of water. The stated purpose of Lake

Oahe was to allow “the irrigation of 750,000 acres of land in the

James River Basin, as well as to provide useful storage for flood

control, navigation, the development of hydroelectric power, and

other purposes.” /d. (citing S. Doc. No. 247, 78th Cong., 2d Sess.,

at 3 (1944)). Thus, Congress enacted the Flood Control Act of

1944. See Flood Control Act of 1944, Pub L. No. 534, §§ 4, 6, 58

Stat. 887, 889-90 (1944). The Act specifically states that the Oahe

Reservoir is under the control of the Secretary of the War. /d. The

title “Secretary of War” was changed to the title “Secretary of the

Army” in 1947. See National Security Act of 1947, Pub. L. No.

253, § 205(a), 61 Stat. 501 (1947).

App. 7

the first portion of the underground pipeline were to be

_ located on property owned or under the control of the Corps.

In December 1972, the City wrote to the Corps to apply

for an easement which would give the City a right-of-way

from the government to build and maintain the water

transport system. The easement was necessary because the

water transport system would be located, in part, on land

owned or under the control of the Corps. The Corps

responded by detailing the information it needed in order to

consider an application for an easement, and the City

complied by furnishing the data requested.

In an internal memorandum dated May 11, 1973, the

Corps recommended that the City be granted the requested

right-of-entry on the designated Corps property, pending final

consideration of the City’s request for an easement.

Subsequently, on July 25, 1973, the Corps forwarded to the

City proposed easement No. DACW45-2-74-6007 granting

the City, for a fifty-year term, a right-of-access across the

Corps’ land for the withdrawal of water from the Reservoir.

The Corps also provided the City with a list of

requirements for obtaining a permit under Section 10 of the

Rivers and Harbors Appropriation Act of 1899, 33 U.S.C.

§ 403. As of August 28, 1973, the City had requested a

Section 10 permit, which it received on November 12, 1973

(Permit). The Permit was officially signed by the Corps on

November 12, 1973 and by Mayor Klein, on behalf of the

City, on November 14, 1973. Distinct from the requested

easement, the Permit allowed the City to maintain the water

intake structure, lay an intake line, and construct a

pumphouse in the Reservoir. The Permit specifically did

“not convey any property rights either in real estate or

material” and contained a release from liability clause stating

that “the United States shall in no way be liable for any

damage to any structure or work authorized herein which

App. 8

may be caused by or result from future operations undertaken

by the Government in the public interest.” Def.’s Ex. 10. at

35-36.

Accordingly, in 1973, the City proceeded with

construction of the water transmission system. The water

supply system was constructed in or around 1973 through

1974 and completed in mid-1975. The water supply system

included a water intake structure located on the floor of the

Reservoir which carried water to the pumphouse on the east

bank of the Reservoir in an inlet called Whitlock’s Bay. An

underground transmission line then ran from the pumphouse

2.5 miles east to a water treatment plant. Following that, an

underground transmission pumpline ran 13.5 miles from the

water treatment plant to the City. According to the

complaint, the water supply system was the City’s sole

source of water. As stated previously, the intake siructure,

the pumphouse, and the first portion of the underground

pipeline were located on property owned or controlled by the

Corps. The total cost for the project was $ 864,000.

On September 25, 1975, after construction_of the project

had been completed, the City advised the Corps that the

easement requested in 1972 had not yet been issued. On that

date, the City wrote to the Corps requesting that a permanent

easement be issued. On November 18, 1975, the Corps

responded with a statement that the City’s request for a

permanent easement was still being processed and had not

yet been approved. A year and a half later, on June 2, 1977,

the Corps sent the City another proposed easement with

purportedly different terms than the previous one. On

October 18, 1977, the Corps sent the City yet another

proposed easement to replace the one sent in June of that

year.

A fourth proposed easement was then sent to the City on

January 24,.1978. Finally, on March 7, 1978, the Corps

App. 9

formally issued Easement No. DACW45-2-78-6002

(Easement) granting the City a right-of-way to construct,

Operate and maintain the pipeline and pumping station.

Defendant acknowledges. that the drafting of the easement

was in progress for several years. Defendant states that it

does not know why the Easement was not finalized until

1978.

Paragraph 7 of the Easement contains the following

clause:

The United States shall not be responsible for

damages to property or injuries to persons which may

arise from or be incident to the use and occupation of

the said premises, nor for damages to the property of

the grantee, nor for damages to the property or injuries

to the person of the grantee’s officers, agents,

servants, or employees, or others who may be on said

premises at their invitation or the :iivitation of any one

of them, arising from or incident to government

activities, and the grantee shali hold the United States

harmless from any and all such claims.

Def.’s Ex. 26 at 64.

On March 7, 1978 the Corps also issued License No.

DACW45-3-78-6001 (License), which gave the City right-of-

use of a nearby strip of land for a period of two years as a

temporary work site to construct the water intake structure

and pumping station. The License was scheduled to expire

on March 6, 1980. The granting of the License was the

natural corollary to the Easement and the Permit. Whereas

the Easement allowed the structures to remain on

governmentally controlled land for a period of fifty years,

and the Permit authorized those structures, to the extent

applicable, to reside in the navigable waters of the United

States, the License allowed the City to have access to

Ra SES SRE LS OE EGS SS a a ae

App. 10

government land as a work site for two years in order to

construct the water transmission system. Paragraph 4 of the

License contained release language similar to that in the

Easement.’

The City asserts that by September 1978 it still had not

received copies of the Easement or the License and inquired

about both;documents at that time. Defendant disagrees with

this contention and avers that the City received a copy of the

Easement ‘near the time of execution. Regardless, both

parties agree that the Corps finally forwarded copies of the

License and Easement on October 16, 1978 to plaintiff, years

after construction of the water system was completed.

Despite receiving the documents, the City claims that the

terms contained in the Easement and the License were never

accepted by the City, as demonstrated by the fact that the

neither the Easement nor the License were ever signed by the

City. Plaintiff contends that because the City did not sign the

Easement or the License, it did not agree to the specific terms

2 The release clause in the License states:

That the United States shall not be responsible for damages

to property or injuries to persons which may arise from or

be incident to the exercise of the privileges herein granted,

or for damages to the property of the licensee, or for

injuries to the person of the licensee, or for damages to the

property or injuries to the person of the licensee’s officers,

agents, servants, or employees, or others who may be on

. said premises at their invitation or the invitation of any one

of them, arising from or incident to governmental activities

on the daid-premises, and the licensee shall hold the United

States harmless from any and all such claims.

Def.’s-Ex. 27.

App. I1

contained therein, most notably, the release from liability

clauses at issue in this lawsuit.

Defendant responds that as part of obtaining the

Easement, Mayor Klein executed an agreement assuring the

City’s compliance with the Department of Defense’s

directive under Title VI of the Civil Rights Act of 1964

(Assurance). Defendant contends that the Assurance, as

signed by the mayor, constitutes acceptance of the terms of

the Easement. The City contends that execution of the

agreement was not necessary to obtain the Easement.

With respect to the License, plaintiff argues that because

the City never signed the License, it did not assent to the

release from liability clause contained therein. Defendant

opposes this contention, averring that the License was indeed

signed by the City’s mayor. Defendant argues that the

mayor’s typed signature was a valid signature and constitutes

acceptance of the terms of the License.

The City operated the water transmission system without

any significant problems until 1995. However, beginning

around the summer of 1995, landslides developed on the

Reservoir’s slope where the intake structure, pumphouse and

underground transmission pipelines were located. As a result

of these landslides, breaks began to develop in the

underground water pipeline running east from the pumphouse

up the slope. According to the affidavit of Mr. Elmer

Nitzschke, city attorney for the City of Gettysburg,

approximately eight breaks occurred in pipelines located on

Corps’ property, while the remaining fifteen breaks occurred

on pipelines located on non-governmentally owned property.

The landslides eventually caused damage to the pump itself

Starting in the summer of 1995. For two years, the City

struggled with repairing numerous breaks in the pipeline. By

late 1997, the damage became so severe that the pumphouse

App. 12

and water transmission pipeline were irreparable and the City

was forced to abandon the water supply system.

Plaintiff contends that the landslides on the slope of the

Reservoir were caused by the Corps’ construction,

management and operation of the Reservoir. Plaintiff alleges

that the damage to the City’s water supply system constitutes

a taking of the City’s property without just compensation and

in violation of due process under the Fifth Amendment of the

United States Constitution. Plaintiff claims that it has”

suffered damages in an amount exceeding $ 1,000,000.

Defendant’s main defense, as asserted in its motion, is

that plaintiffs takings claim fails because the release

language contained in the Easement, License, and Permit

precludes suit. Defendant contends that this is the case

because the water supply system in question was located on

land owned by the government to which the License,

Easement and Permit applied. Defendant also contends that

damages should be limited in that regard because, even prior

to the City’s abandonment of the water system in 1997, the

City had been investigating switching to an alternative source

of water. Defendant finally asserts that the government

shouldered much of the cost for the City to switch to an

alternative water source.

Il. Procedural History

Plaintiff filed its complaint against defendant on

December 20, 2000. On September 6, 2002, defendant filed

its Motion to Dismiss Complaint For Failure To State A

Claim Or In The Alternative For Summary Judgment. With

it, defendant filed an appendix of exhibjts but failed to

include its proposed findings of uncontroverted fact pursuant

to Rule 56(h) of the United States Court of Federal Claims

(RCFC). On October 4, 2002, plaintiff filed its response to

defendant’s motion, also without submitting any proposed

App. 13

findings of fact. To rectify the error, on October 10, 2002,

the court ordered defendant to file its proposed findings of

fact by November 12, 2002. City of Gettysburg v. United

States, No. 00-773 L, slip op. at 2 (Oct. 10, 2002). The court

ordered the Clerk’s office to return plaintiff's response to

plaintiff and for plaintiff to resubmit its response by

December 13, 2002. On that date, plaintiff filed its Brief in

Opposition to Defendant’s Motion, Plaintiff's Statement Of

Uncontroverted Facts, and Plaintiffs Response To

Defendant’s Proposed Findings Of Uncontroverted Fact In

Opposition to Defendant’s Motion For Summary Judgment.

On January 28, 2003, defendant filed its Reply On Its Motion

To Dismiss Or In The Alternative for Summary Judgment.

On October 15, 2003, this court ordered the parties to file

supplemental briefs regarding various issues and questions

the court had propounded to the parties. In particular, the

court required the parties to discuss whether the conduct

herein constituted a tort over which this court lacked

jurisdiction. Defendant filed its supplemental brief on

December 17, 2003 stating that the government is not

asserting as one of its defenses that this court lacks

jurisdiction over plaintiff's action because the claim sounds

in tort.’ Again on December 22, 2004, the court ordered that

additional supplemental briefs be filed on specified issues

propounded by the court. Now that the briefing is complete,

the court renders this opinion.

* Plaintiff filed its supplemental brief on January 16, 2004.

The parties were also given time to file respective responsive

briefs.

DISCUSSION

|. Standard of Review

Defendant has moved this court to dismiss plaintiff's

claim under RCFC 12(b)(6) for failure to state a claim upon

which relief can be granted. RCFC 12(b) provides that “if on

a motion ... to dismiss for failure of the pleading to state a

claim upon which relief can be granted, matters outside the

pleading are presented to and not excluded by the court, the

motion shall be treated as one for summary judgment and

disposed of as provided in RCFC 56.” RCFC 12(b). Both

parties have referred to extra-pleading materials in support of

their respective positions. Plaintiff submitted, and references

in its brief, the affidavit of Elmer Nitzschke, city attorney for

the City of Gettysburg, in its opposition. Defendant has”

submitted thirty-two exhibits in support of its motion. Once

the court decides to accept extra-pleading material, it must

convert the 12(b)(6) motion into a Rule 56 motion. Schultz v.

United States, 5 Cl. Ct. 412, 416 (1984) (because plaintiff

presented matters outside the pleadings, court was required to

treat motion for judgment on the pleadings as a motion for

summary judgment); see also De Brousse v. United States, 28

Fed. Cl. 187, 188 (1993) (treating motion to dismiss as

motion for summary judgment because extra-pleadings

matters were not excluded by the court); Keating v. BBDO

International, Inc., 438 F. Supp. 676, 679-80 (S.D.N.Y.

1977) (under the Federal Rules of Civil Procedure).

RCFC 12(b) provides that when an RCFC 12(b)(6)

motion is converted into an RCFC 56 motion, the parties

“shall be given a reasonable opportunity to present all

material made pertinent to such a motion by RCFC 56.”

RCFC 12(b); see also Thoen v. United States, 765 F.2d 1110,

1114 (Fed. Cir. 1985) (“Cases from this court and. other

courts underscore the importance of the opportunity for the

opposing party to counter a summary judgment motion.”). In

{

XX EOE EEE EE EOE EEE EEE EE en

App. 15

this instance, because defendant moved in the alternative for

summary judgment, plaintiff has had ample time to submit

materials and arguments against summary judgment. This is

evidenced most clearly by the affidavit and materials

submitted by plaintiff with its opposition brief. Plaintiff,

itself, agrees that defendant’s motion should be reviewed

under a RCFC 56 standard.

Accordingly, because the court does not exclude the

extra-pleading materials submitted by the parties and because

plaintiff has had ample opportunity to present all materials

and arguments in support of its position against defendant’s

motion for summary judgment, defendant’s motion to dismiss

will be treated as a motion for summary judgment under

RCFC 56. See RCFC 12(b).

The moving party is entitled to summary judgment “if the

pleadings, depositions, answers to interrogatories, and

admissions on file, together with the affidavits, if any, show

that there is no genuine issue as to any material fact and that

the moving party is entitled to a judgment as a matter of

law.” RCFC 56(c). Defendant, as the moving party, has the

burden of establishing the absence of disputed genuine issues

of material fact and its entitlement to judgment as a matter of

law. Celotex Corp. v. Catrett, 477 U.S. 317, 322-23, 91 L.

Ed. 2d 265, 106 S. Ct. 2548 (1986). A genuine issue of

material fact is one that would change the outcome of the

litigation. Anderson v. Liberty Lobby, Inc., 477 U.S. 242,

247-48, 91 L. Ed. 2d 202, 106 S. Ct. 2505 (1986). In the

capacity of opposing defendant’s motion, plaintiff has the

burden of providing sufficient evidence to show that a

genuine issue of material fact indeed exists. Celotex, 477

U.S. at 322. Any evidence presented by the nonmovant is to

be believed and all justifiable inferences are to be drawn in

its favor. Anderson, 477 U.S. at 255. Summary judgment

pursuant to RCFC 56 properly can intercede and prevent trial

if the movant ‘can demonstrate that trial would be useless in

App. 16

that more evidence than is already available in connection

with its motion could not reasonably be expected to change

the result. Pure Gold, Inc. v. Syntex (U.S.A.), Inc., 739 F.2d

624, 626 (Fed. Cir. 1984).

Defendant requests that this court rule in favor of its

motion for summary judgment on the basis that plaintiff's

theories ofirelief, measured against all evidentiary materials

submitted by the parties, do not state a claim upon which

relief can be can granted. Thus, the inquiry on this motion

for summary judgment is whether, affording plaintiff the

presumptively favorable view of the facts to which it is

entitled, defendant has discharged its burden of showing that

it is entitled to judgment as a matter of law.

Ii. Analysis

A. Preliminary Inquiries

Having determined that the RCFC 56 summary judgment

standard will apply to the instant motion, the court will first

review preliminary inquiries the parties have presented in

their submissions. In particular, the court must address (1)

whether plaintiff has a proper cognizable property interest

suitable for raising a takings claim in this court and (2)

whether defendant’s laches defense bars plaintiff's claim.

1. Cognizable Property Interest

The government argues that the court lacks jurisdiction

over this matter because plaintiff does not have a

compensable property interest sufficient to assert a Fifth

Amendment takings claim. To determine whether plaintiff

has a sufficiently cognizable property interest to support its

takings claim, it is useful for the court to briefly discuss what

a takings claim entails.

App. 17

Plaintiff alleges that the “damage to the_City’s water

supply system constitutes a taking without just compensation

and due process of law under the Fifth Amendment of the

United States Constitution.” Compl. P 5. When a

municipality condemns a property, but fails to conduct an

eminent domain proceeding before the taking of the property,

the action is one for “inverse condemnation.” See Agins v.

City of Tiburon, 447 U.S. 255, 258 n.2, 65 L. Ed. 2d 106,

100 S. Ct. 2138 (1980) (“Inverse condemnation should be

distinguished from eminent domain. Eminent domain refers

to a legal proceeding in which a government asserts its

authority to condemn property. Inverse condemnation is ‘a

shorthand description of the manner in which a landowner

recovers just compensation for a taking of his property when

condemnation proceedings have inot been instituted.””) (citing \

United States v. Clarke, 445 U.S. 253, 257, 63 L. Ed. 2d 373,

100 S. Ct. 1127 (1980)); see also Kim C. Pflueger, Takings

Law - Is Inverse Condemnation an Appropriate Remedy for

Due Process Violations?, 57 Wash. L. Rev. 551, 572 (1982)

(stating that a property owner is entitled to institute a suit for

inverse condemnation to compel an ex post facto recovery of

just compensation) (citing Van Alstyne, TZaking Or

Damaging By Police Power: The Search For Inverse

Condemnation Criteria, 44 S. Cal. L. Rev. 1 (1970); Note,

Inverse Condemnation: Its Availability in Challenging the

Validity of a Zoning Ordinance, 26 Stan. L. Rev. 1439

(1974)). Neither party in this action alleges that any formal

condemnation proceeding in this matter has been instituted.

In view of the fact that this matter is an inverse

condemnation action, this court must next address the

threshold question as to whether there is subject matter

* To “condemn” property in this sense means to determine and

declare property to be assigned to public use. Black’s Law

Dictionary 310 (8th ed. 2004).

App. 18

jurisdiction to entertain this case. The court entertains the

jurisdictional questions first and foremost, since jurisdiction

is a prerequisite which must be met prior to any substantive

issues presented by summary judgment. See Lockheed

Martin Corp. v. United States, 50 Fed. Cl. 550, 553 (2001),

aff'd, 48 Fed. Appx. 752, 2002 WL 31164088 (Fed. Cir.

Sept. 30, 2002) (unpublished).

A jurisdictional requirement to bring a takings claim in

this court is that the government’s action be authorized. See

Tabb Lakes, Ltd. v. United States, 10 F.3d 796, 802 (Fed. Cir.

1993) (citations omitted); Sun Oil Co. v. United States, 572

F.2d 786, 819, 215 Ct. Cl. 716 (Ct. Cl. 1978). The United

States possesses the requisite authority to improve navigable

waters of the United States in the interest of improving

navigation. 33 U.S.C. § 1, ef seq.; see also United States v.

Kansas City Ins. Co., 339 U.S. 799, 804, 94 L. Ed. 1277, 70

S. Ct. 885, 116 Ct. Cl. 897 (1950). The Army Corps of

Engineers has been delegated with the responsibility of care

and guardianship of the navigable waters of the United

States. 33 U.S.C. § 1, et seqg.; 33 C.F.R. § 322.5 (2004).

Both parties in this case agree that the Oahe Reservoir

constitutes navigable waters of the United States.” Defendant

> In Alameda Gateway, Ltd. v. United States, this court recited

the inquiry to be used to determine if a body of water constitutes

“navigable waters of the United States” in the case of navigable

servitudes. 45 Fed. Cl. 757, 764 (1984). The court identified a

distinction between Congress’ ability to regulate navigable waters

of the United States through the Rivers and Harbors Appropriation

Act and the government’s application of a navigable servitude in

the case of a public right-of-access to a water body. /d. (citing

Kaiser Aetna v. United States, 444 U.S. 164, 172, 62 L. Ed. 2d

332, 100 S. Ct. 383 (1979)). Navigational servitude, which derives

from the Constitution’s Commerce Clause, gives the government a

dominant servitude or power to regulate and control the waters of

the United States in the interest of commerce. See United States v

: (continued...)

App. 19

asserts that water levels in the Reservoir must, at times, be

raised or lowered to assist in the production.of hydroelectric

power, flood control, downstream navigation, irrigation, etc.

This operation is clearly authorized under the power

conferred by Congress to the Corps. See Engineering and

Design; Water Control Management, 47 Fed. Reg. 44,543

(Oct. 8, 1982) (codified at 33 C.F.R. pt. 222) (providing

guidance to the Corps of Engineers in performing water

control management activities under the Flood Control Act).

Accordingly, even if the parties were challenging the Corps’

authorization to operate the Oahe Dam, the court, sua sponte,

finds that the Corps’ activity in this matter was authorized.

In addition to demonstrating that the government activity

was authorized, plaintiff must also show that it has a

cognizable property interest. See, e.g., Wyatt v. United

States, 271 F.3d 1090, 1097 (Fed. Cir. 2001) (cognizable

property interest is a requirement for asserting an action for a

compensable taking under the Fifth Amendment), cert.

denied, 535 U.S. 1077, 152 L. Ed. 2d 1021, 122 S. Ct. 1960

(2002). The parties have differing contentions as to whether

plaintiff possesses the requisite cognizable property interest.

The City asserts that it has a cognizable property interest in

its damaged pipelines and related water transmission system

equipment by virtue of its ownership of that property.

Plaintiff asserts that “it is undisputed that the City owned,

installed and maintained the pipe ine.” Pl.’s Supp. Brief at 7.

Rands, 389 U.S. 121, 122-23, 19 L. Ed. 2d 329, 88 S. Ct. 265

(1967). The court in Alameda Gateway, citing Owen v. United

States, 851 F.2d 1404, 1408-09 (Fed. Cir. 1988), went onto

Observe that the federal navigational servitude defines the

boundaries within which the government may supercede private

ownership interests in order to improve navigation. Alameda

Gateway, 45 Fed. Cl. at 763.

App. 20

Defendant contests the City’s assertion that it has a

cognizable property interest in the water transmission system

structures. Although the government agrees that the City’s

ownership of the water pipelines and related structures

generally constitute personal property and is a property

interest, defendant argues that the Section 10 Permit granted

to the City merely creates a license to build and maintain

permitted structures in the Reservoir and does not convey any

property right to the City, based on the fact that the Permit

itself states that the instrument does not convey any property

rights in real estate or material. Defendant further argues that

even if plaintiff were to have a property interest in the

physical water transmission system, such system has “no

value” absent a connection to a water source, in which

plaintiff has no proprietary interest since a party cannot have

a property interest in the navigable waters of the United

States.°

Plaintiff counters that even if the City does not have a

property interest in the work authorized by the Permit (the

water intake structure, the pumphouse and a portion of the

intake line), the City at least has a property interest in the

underground pipeline running past the Reservoir towards the

City located on nongovernmentally controlled or owned

property since that work was not under the scope of the

Permit. Plaintiff notes that the City was not required to

obtain any approval under the Permit for construction of the

transmission pipeline running past the pumphouse eastward

° Plaintiff counterargues that even if the Permit itself may not

have granted plaintiff any property rights, the Easement did. It

seems counterintuitive that the City would allege that it has a valid,

cognizable property interest by virtue of the Easement, while at the

same time, arguing that the City never accepted the terms of the

Easement in the context of rejecting the release language contained

therein. The court addresses this argument in Sec.I1.B.1.

. App. 21

beyond the Reservoir’s slope because that portion of the

. waterlines. was. not. located in navigable waters nor on

government property. Furthermore; the damage to that

portion of the pipeline alone, plaintiff argues, rendered the

remaining structures, including the pumphouse, water

treatment facility and the intake structure, completely useless.

Section 10 of the Rivers and Harbors Appropriation Act

of 1899 requires a permit to place structures in navigable

waters of the United States (colloquially referred to as a

“Section 10” permit). 33 U.S.C. § 403. This statute prohibits

the obstruction of navigable waters of the United States

except when initiated by a plan recommended by the Corps

of Engineers and approved by the Secretary of the Army. /d.;

see also Deltona Corp. v. United States, 657 F.2d 1184,

- 1185, 228 Ct. Cl. 476 (Ct. Cl. 1981), cert. denied, 455 U.S.

| 1017, 72 L. Ed. 2d 135, 102 S. Ct. 1712 (1982). The

Secretary of the Army has delegated to the Corps the

authority to issue or deny Section 10 permits. /d. at 1186

(citing 33 C.F.R. § 322.5 (1980)).

In this instance, the Permit, along with the Easement and

License, authorized the City to construct and maintain the

water intake structure, the pumphouse, and the water intake

line in the Reservoir. Thus, the issue to be determined is,

whether, in light of or despite the license to maintain

structures in navigable waters, as afforded by the Permit,

plaintiff has a cognizable property interest in the water

transmission system. If so, does the property interest further

create a distinction between those structures that reside in

navigable waters, versus those structures merely connected to

structures residing in navigable waters.

The Permit states that it “does not convey any property

rights either in real estate or material ....” Def.’s Ex. 10 at

35. Defendant argues that this language precludes plaintiff's

claim, especially in light of United States v. 5.96 Acres of

App. 22

Land, 593 F.2d 884, 888 (9th Cir. 1979), upon which

defendant relies. The court first notes that though it is true

that the Permit grants no property interest in either real estate

or material, that does not mean that the City has no property

interest at all. That language simply means that no additional

property interests are conveyed by virtue of the issuance of

the Permit.

Second, the court finds 5.96 Acre: »f Land inapplicable to

this issue.. There, the State of Washington leased aquatic

lands located immediately upstream from the Benneville

Dam to the Knappton Towboat Company. 593 F.2d at 884.

Knappton built various pilings, dolphins, and dikes on the

leased lands for timber storage. At the same time, the

government was completing the Second Powerhouse Project

which would raise the water level behind the dam, thereby

weakening the structures Knappton had already built. To

preserve them, Knappton needed to rebuild the structures at

considerable expense. Knappton argued that this constituted

a compensable taking under the Fifth Amendment by the

federal government.’

Knappton, like the City, had received a Section 10 permit

under the Rivers and Harbors Appropriation Act, which

expressly forbids the construction of any structure in

navigable waters unless authorized by the Secretary of the

Army. See 33 U.S.C. § 403. In 5.96 Acres of Land, the

government argued that the structures built by Knappton

were authorize” by permits that were revocable at will and

therefore, Knappton had no property interest cognizable

under thie Fifth Amendment.

’ The State of Washington, also a plaintiff in the suit, claimed a

loss from the anticipated decrease in rental value of the aquatic

lands due to the operation of the dam.

App. 23

Knappton tried, albeit too late, to assert that no permit

had been obtained. The court noted that in prior pleadings,

Knappton never denied obtaining the permit and implicitly

admitted that permits had been obtained. Moreover, the court

noted that if no permit had ever been obtained, the structures

would have been unlawful and their removal would not have

required compensation. 5.96 Acres of Land, 593 F.2d at 888.

Nevertheless, focusing on the fact that the permits had

indeed been issued, the United States Court of Appeals for

the Ninth Circuit (Ninth Circuit) held that the Section 10

permit granted Knappton a mere license to build and

maintain its structures. /d. The court held that, as such, the

permit was revocable at will by the government. /d. The

court also noted that the permit language indicated that the

government could require removal of the structures as well.

Id. Although in 5.96 Acres of Land the permits were not

actually revoked, the court found that the net effect of the

permit language and the nature of the Section 10 permit in

general lent to finding that Knappton had no cognizable

property interest in his structures with respect to the

government’s ability to revoke the permit or have the

structures removed. /d.

The Section 10 Permit at issue here contains a revocation

clause similar to that found in 5.96 Acres of Land. This,

arguably, would lend to a finding that because the Permit is

revocable at will by the government, the City has no

cognizable property interest. This notion has been iterated

with respect to licenses and permits in general. “Licenses or

permits are traditionally treated as not protected by the

Takings Clause because they are created by the government

and can easily be cancelled by the government and normally

are not transferable.” American Pelagic Fishing Co. v.

United States, 49 Fed. Cl. 36, 46 (2001), rev'd and remanded

on other grounds, 379 F.3d 1363 (Fed. Cir. 2004). This is

because permits and licenses lack one or more indicia of

App. 24

property ownership. Arctic King Fisheries, Inc. v. United

States, 59 Fed. Cl. 360, 371 (2004).

Yet this court does not agree with the holding in 5.96

Acres of Land and finds that a property interest in plaintiff's

water transmission system exists. In Conti v. United States,

the Federal Circuit found that no property interest existed in

plaintiff's fishing permit, but yet a property interest did exist

in plaintiff's fishing vessel and nets when a regulation

restricted plaintiff's fishing activities by limiting plaintiff's

use of drift gillnets. 291 F.3d 1334, 1343 (Fed. Cir. 2002).

The Federal Circuit found that plaintiff's mere license to fish

did not qualify as a protectable property interest given that

the fishing permit did not confer rights generally found in

one’s bundle of property rights and because the fishing

permit was suspendable and revocable. /d. at 1341-42.

However, plaintiff's physical boat and gear did constitute a

property interest sufficient to assert a takings claim. /d. at

1343. The same distinction can be drawn in the case at bar.

Although the City may not have a property interest in the

permit itself, it does have a property interest in its damaged

pipeline. The court disagrees with 5.96 Acres of Land’s

holding that a Section 10 permit leaves a plaintiff devoid of

any property interest when physical structures are damaged.

The Ninth Circuit fails to acknowledge those property

interests which exist independent of a given perinit or license.

In this instance, the City is not claiming a taking of any

interest conveyed by the Permit, such as the right to occupy

navigable waters or have access to government-owned land

or an interference with water or lease rights. The claim here,

rather, arises out of the frequent breaks in the underground

pipeline caused by landsliding on the slopes of the Reservoir.

The City seeks recovery for the physical loss of the damaged

pipeline and equipment from soil movement allegedly caused

by the government’s operation of the Reservoir. The City

has specifically limited its claim to the taking of the physical

App. 25

pipelines and not to a taking of water rights or a right to

maintain structures in navigable waters.

Thus, in examining this case in light of 5.96 Acres of

Land, the court agrees with the City that it has a cognizable

property interest in the entire water transmission system for

the purpose of asserting a Fifth Amendment takings claim.

This includes the structures located in the Reservoir (such as

the water intake structure, transmission line and pumphouse)

and, also, the pipelines leading from the water treatment

facility towards the City. There is no disagreement between

the parties that just as having an interest in real property

creates a cognizable property interest for the purposes of

asserting a cause of action for inverse condemnation, so does

one’s interest in tangible or personal property. Tangible

property may be the subject of a takings claim. Andrus v.

Allard, 444 U.S. 51, 65, 62 L. Ed. 2d 210, 100 S. Ct. 318

(1979); Maritrans, Inc. v. United States, 342 F.3d 1344, 1352

(Fed. Cir. 2003) (finding a property interest sufficient for a

takings claim in barges); King v. United States, 427 E.2d 767,

769-70, 192 Ct. Cl. 548 (Ct. Cl. 1970) (interference with

crops due to overflow of river constitutes a sufficient

property interest to assert a fifth amendment takings claim).

In further support of the City’s claim of a cognizable

property interest in this case, the court also examines the

holding in Maritrans. There, the government argued that

since Maritrans utilized its single hull barges in navigable

waters of the United States, the property interest Maritrans

asserted in the use of its vessels on such waterways could not

give rise to a protected property interest since the waters of

the United States are public property. 342 F.3d at 1352-53.

Similarly here, the government argues that because the water

transmission system structures are maintained in navigable

waters of the United States, or are connected to structures

maintained in navigable waters of the United States, that the

App. 26

City has no cognizable interest. However, the Maritrans

court found that:

Those facts do not somehow diminish or

eliminate the basic property interest that

Maritrans has in its single hull tank barges.

Maritrans has various rights in its barges that

qualify them as property for Fifth Amendment

protection. For example, Maritrans may sell or

otherwise dispose of the barges; it may possess

and transport them; and it may alter them by

adding a second hull.

Id. at 1353 (citing Andrus, 444 U.S. at 66).

Just as Maritrans had a property interest in its barges, the

City has a property interest in the water transmission system

and pipelines that it paid for and utilized. Such is the case

since the City could have abandoned these lines (which it

ultimately did), or could have theoretically sold or otherwise

disposed of the pipelines. The right to use and dispose of

property is fundamental in the bundle of property rights. In

this instance, no other town or city was utilizing the water

transmission system and no other entity had paid for its

construction. See Andrus, 444 U.S. at 66 (suggesting that the

right to possess, transport, donate, devise and sell are all

“sticks” in the bundle of property rights). It is clear from the

facts presented that the City has a cognizable property

interest in the water transmission system.

Defendant, lastly, raises an argument in its Supplemental

Brief that plaintiff has no cognizable property interest due to

the existence of the government’s navigational servitude. In

particular, defendant asserts that plaintiff cannot have

compensable property rights in portions of the water system

located below the mean high-water mark of the Reservoir.

App. 27

This argument necessitates an explanation of what the

government’s navigational servitude entails.

All navigable waters are under the contro] of the United

States for the purpose of regulating and improving

navigation. Gilman v. City of Philadelphia, 70 U.S. (3 Wall.)

713, 724, 18 L. Ed. 96 (1865); see also Gibson v. United

States, 166 U.S. 269, 272-73, 41 L. Ed. 996, 17 S. Ct. 578, 32

Ct. Cl. 621 (1897). Although title to the shore and

submerged soil of navigable waters belongs to. the various

states and individual owners, such title is always subject to

the government’s navigational servitude. Gibson, 166 U.S. at

272. This means that the United States has the power to

invade property rights in land within the bed of a stream

(which includes all lands below the ordinary high-water

mark), without paying compensation, when the purpose of

the invasion is to aid in the navigability of the stream. Tri-

State Materials Corp. v. United States, 550 F.2d 1, 5, 213 Ct.

Cl. 1 (Ct. Cl. 1977) (citation omitted); Coastal Petroleum Co.

v. United States, 524 F.2d 1206, 1209, 207 Ct. Cl. 701 (Ct.

Cl. 1975), cert. denied, 449 U.S. 1011, 66 L. Ed. 2d 469, 101

S. Ct. 567 (1980). The bed of a navigable stream includes

the adjacent banks up to the ordinary high-water mark. Tri-

State Materials, 550 F.2d at 6. Land within the bed is always

subject to (or burdened with) the potential exercise of

navigational servitude. /d. An owner of such land may not

claim compensation when the government takes the land

pursuant to aiding navigability of the stream. /d. (citing

United States v. Chicago, Milwaukee, St. Paul & Pacific

R.R., 312 U.S. 592, 596, 85 L. Ed. 1064, 61 S. Ct. 772

(1941)).

The court does not view the operation of navigational

servitude as being controlling in this case. First, not all of the

property at issue in this matter is part of the bed of a

navigable stream. The majority of the damage claimed by

the City is to pipelines not located on the Reservoir bed. PIl.’s

App. 28

Brief in Opp. to Def.’s Mot. to Dismiss at 7; Def.’s Reply to

P|.’s Supp. Brief at 3 (“Indeed the Reservoir itself is located a

considerable distance away from, and much lower in

elevation than, the area where the majority of pipeline breaks

occurred.””). See Owen v. United States, 851 F.2d 1404, 1411

(Fed. Cir. 1988) (holding that erosion caused by underground

seepage occurring below the ordinary high-water mark but

outside the stream bed constituted a compensable

government taking).

Second, the City is not claiming damage due to a loss of

rights in the water. Normally the navigational servitude

doctrine is invoked by the government when the government

needs to alter the direction of water flow from its natural

course. For example in United States v. Twin City Power

Co., 350 U.S. 222, 100 L. Ed. 240, 76 S. Ct. 259 (1956),

plaintiff argued that the government’s action of altering the

flow of a river caused its hydroelectric operations to be

impeded since the operations were dependent upon

maintaining the status quo of the river. The court held that

the flow of the river was subject to navigational servitude and

that the owners of “fast lands” (land beyond the bed of a

navigable stream) could not be awarded compensation for

their interest in that flow if the government caused the flow

of the river to be altered. /d. at 227. In United States v.

Virginia Electric & Power Co., 365 U.S. 624, 5 L. Ed. 2d

838, 81 S. Ct. 784 (1961), which also involved water power

operations, damage to plaintiff's property included uses of

the property not associated with the flow of the river. These

non-riparian damages were held compensable, while the

riparian uses were held noncompensable due to the

application of the government’s navigational servitude. /d. at

629-31.

In this instance, the court does not see how the value

claimed to have been taken derives from the City’s access or

use of the Reservoir itself. The City is not claiming a loss of

App. 29

access to water or that the raising and lowering of water

levels resulted in a direct interference with an operation

relying chiefly on water power. The takings claim is solely

premised on physical damage done to the water transmission

system from the landslides caused by the government’s

operation of the Reservoir.® Simply put, this claim does not

relate to a direct reliance on the flow of a navigational stream

or a riparian use of a navigable stream (such as fishing,

irrigation, or use in a chemical plant process) to which the

government’s navigational servitud: would- preclude

recovery. See Tri-State Materials, 550 F.2d at 8.’

* For the purposes of this decision, the court accepts the City’s

contention that defendant’s actions resulted in the claimed damage,

although the court recognizes that there is a dispute of material fact

as to whether the government’s operation of the Reservoir was

actually the source of damage to the City’s water transmission

system. As explained further in this opinion, the court does not

need to address, on the merits, defendant’s alleged liability with

respect to the damage sustained by plaintiff.

” The court cannot ignofe the holding in Coastal Petroleum

with respect to the application of navigational servitude in flood

control situations. 524 F.2d at 1210. Plaintiff therein argued that

the right of the United States to take or use submerged property is

limited to actions in aid of navigation, and that the work at issue

there was related to flood control as opposed to aiding navigation.

The Coastal Petroleum court identified a number of cases where

this court, and its predecessors, have upheld the application of

navigational servitude in instances of flood control projects. /d.

The court opined that a failure to execute proper flood control

mechanisms can have a disastrous effect on navigation and many

statutes in which flood control projects are authorized list

navigation as a benefit served by such project. Jd. However

Coastal Petroleum involved plaintiff's claim of a property right in

limestone located at the bottom of a lake floor pursuant to a lease

granting plaintiff the right to mine that limestone and damage

based on the building of a levee which prevented mining. The

(continued...)

App. 30

Accordingly, the court rejects defendant’s argument that the

City lacks a- cognizable property interest in its water

transmission system due to navigational servitude.

Having concluded that plaintiff possesses a cognizable

property interest, and just prior to addressing defendant’s

contention that the doctrine of laches bars plaintiff's claims,

it is appropriate to briefly turn to the' issue of whether the

City’s claim sounds in tort. The court notes that although

defendant raises in its April 30, 2001 answer the defense that

plaintiff's cause of action fails because it sounds in tort,

defendant, upon specific inquiry by the court, no longer

difference herein is that the City is not claiming a property right to

a body of water or submerged land leased by the City within a

body of water itself. Here, plaintiff is claiming an interest in its

own structures and equipment that happen to be located on land in

navigable waters. The Supreme Court cases cited in Coastal

Petroleum are inapposite to this lawsuit. For example, Twin City

Power involves a claim of the use of navigable waters for

plaintiff's hydroelectric plant. 350 U.S. at 232-34. also involved

the taking of water power rights. United States v. Grand River

Dam Authority, 363 U.S. 229, 231-33, 4 L. Ed. 2d 1186, 80 S. Ct.

1134 (1960). In United States v. Commodore Park, Inc., 324 U.S.

386, 391-93, 89 L. Ed. 1017, 65 S. Ct. 803 (1945), the issue therein

involved the government’s dredging of a navigable bay which

caused the deposit of dredged materials in a creek, thus reducing

the value of riparian property contiguous to the creek. Similarly, in

State of Oklahoma ex rel. Phillips v. Guy F. Atkinson Co., 313 U.S.

508, 525-26, 85 L. Ed. 1487, 61 S. Ct. 1050 (1941), the issue

therein involved whether the government could construct a dam,

which the State of Oklahoma alleged, if built, would impound river

waters and cause flooding onto valuable oil-producing property.

All of these cases are inapposite to the scenario presented by the

City involving physical damage caused by the government’s

alleged activity.

App. 31

asserts that the court lacks subject matter jurisdiction over

_ this claim because plaintiffs claim constitutes a tort. The

court further notes in this regard that both this court and the

Federal Circuit have held that where the government is

charged with tortious acts stemming primarily from a

contractual obligation, the plaintiff's claim must arise from

and be based upon a breach of contract suit and not on the

tort. See, e.g. McAbee Construction v. United States, 97 F.3d

1431, 1433 (Fed. Cir. 1996); Olin Jones Sand Corp. v. United

States, 225 Ct. Cl. 741, 745 (1980); Fountain v. United

States, 427 F.2d 759, 761, 192 Ct. Cl. 495 (Ct. Cl. 1970),

cert. denied, 404 U.S. 839, 30 L. Ed. 2d 73, 92 S. Ct. 131

(1971). Accordingly, because of the government’s

withdrawal of its assertions that plaintiff's claim sounds in

tort and because the court perceives no basis to disagree with

defendant, no further examination by the court is deemed

necessary on this issue.

2. Defendant’s Laches Argument

The court must also address whether the City’s claim is

time-barred, both with regard to the statute of limitations

yoverning suits in this court, and under the doctrine of laches,

which defendant has asserted as a defense in its reply brief to

the court. The court finds that it is not.

With respect to the statute of limitations governing claims

in this court, suits must be brought within six years of the

accrual of the claim. 28 U.S.C. § 2501. Accrual takes place

when all the events necessary to give rise to the alleged

liability have occurred. Chipps v. United States, 19 Cl. Ct.

201, 203 (1990) (citations omitted), aff'd, 915 F.2d 1585

(Fed. Cir. 1990). In the instance of takings, accrual of a

claim occurs as of the date of the alleged taking. See Banks

v. United States, 314 F.3d 1304, 1308 (Fed. Cir. 2003) (“The

accrual of a takings claim where the government leaves the

taking of property to a gradual physical process occurs when

App. 32

the situation has stabilized.”); Boling v. United States, 220

F.3d 1365, 1370 (Fed. Cir. 2000) (“In general, a takings

‘claim accrues when ‘all events which fix the government’s

alleged liability have occurred and the plaintiff was or should

have beer aware of their existence.’”) (citing Hopland Band

of Pomo Indians v. United States, 855 F.2d 1573, 1577 (Fed.

Cir. 1988)); Seldovia Native Assoc., Inc. v. United States, \44

F.3d 769, 774 (Fed. Cir. 1998) (the key date for accrual

purposes is the date on which the plaintiff's land has been

clearly and permanently taken).

In this instance, the City alleges that in the summer of

1995 and continuing into 1997, landslides, alleged to have

been caused by Corps’ operation of the Reservoir, caused

damage tothe City’s water transmission pipelines and

pumphouse to the point that the City’s property was

irreparable. Suit commenced on December 20, 2000, thus

falling within the Tucker Act’s requisite six-year statute of

limitations period.

Despite the fact the City’s claim meets this statutory

requisite, defendant argues that the equitable doctrine of

laches should be applied to bar plaintiffs lawsuit. In

particular, defendant asserts the defense of laches against

plaintiff's argument that because the City never assented to

the terms of the Easement, the Easement’s release language

does not preclude suit. Defendant argues that if the Easement

eontained terms other than those the City agreed to, the City

should have stated so in October 1978, at the time the

Easement was finalized, instead of during this present

litigation.

Normally, under RCFC 8(c), the affirmative defense of

laches must be plead in the first responsive pleading or it is

deemed waived and excluded. See Todd v. United States,

292 F.2d 841, 843, 155 Ct. Cl. 87 (Ct. Cl. 1961); Dean v.

United States, 10 Cl. Ct. 563, 568 (1986). Defendant failed

App. 33

to include laches as an affirmative defense in its April 30,

2001 answer. However, this court has allowed the defense of

laches to be raised upon a motion to dismiss or a motion for

summary judgment, despite a party’s failure to affirmatively

raise the defense in its answer, in light of the liberal policy of

the Federal Rules of Civil Procedure, upon which this court’s

rules are based. Dean, 10 Cl. Ct at 568 n.10; see also Al-

Kurdi v. United States, 25 Cl. Ct. 599, 604 (1992).'°

In order to successfully bar a plaintiff's claim based on

the doctrine of laches, the proponent of the defense must

show (1) that plaintiff unreasonably delayed in asserting its

cause of action, and (2) that plaintiff's delay resulted in

prejudice to defendant. Lincoln Logs Ltd. v. Lincoln Pre-cut

Log Homes, Inc., 971 F.2d 732, 734 (Fed. Cir. 1992); Conner

v. United States, 10 Cl. Ct. 110, 112 (1986). The burden of

establishing inexcusable delay and prejudice is on the

proponent and failure to prove both elements is fatal to the

establishment of laches. Costello v. United States, 365 U.S.

265, 282, 5 L. Ed. 2d 551, 81 S. Ct. 534 (1961).

Defendant argues that the City should be precluded from

asserting its compensable takings claim because the

Easement was issued twenty-four years ago and, accordingly,

if the City rejected the terms of the Easement (in particular,

the hold harmless language that defendant argues bars the

City’s takings claim), then the City should have objected to

the easement language at the time of issuance, and not

twenty-four years later.

With respect to defendant’s laches argument, defendant

has not shown that plaintiff unreasonably delayed in asserting

its cause of action. The cause of action in this matter is the

os , . , i. . .

° For a more detailed discussion of waiver of affirmative

defenses in this court, see discussion infra pp. 28-30.

App. 34

alleged taking of the City’s water transmission system

resulting from defendant’s conduct of lowering and raising

water levels, allegedly causing landslides and damage to the

City’s water transmission system. Defendant has not argued

any delay or prejudice with respect to when plaintiff opted to

bring its lawsuit; in this instance, in the year 2000, five years

after the first signs of damage. Without evidencing that

plaintiff unreasonably delayed in bringing its takings claim,

or any prejudice stemming from such delay, defendant’s

laches defense fails.

The lengthy delay of which defendant complains does not

regard the timing of plaintiff's lawsuit, but, rather, the time

that has lapsed between when the Easement was issued (or at

least received by the City) and plaintiff's challenge to its

validity. This argument more appropriately describes an

assertion of equitable estoppel, as opposed to laches. The

applicability of the doctrine of equitable estoppel to this

matter is discussed in much further detail below.

B. Substantive Arguments

1. Applicability of the Easement’s Release Clause

a. The City’s Challenge of the Validity of the Easement

Having satisfied the jurisdictional requisites for this court

to entertain this matter, the court must now address the

substantive issue as to whether the release language

contained in the Easement bars the City’s claim. According

to defendant, paragraph 7 of the Easement contains the

following language:

The United States shall not be responsible for

damages to property or injury to persons which may

arise from or be incident to the use and occupation of

the said premises, nor for damages to the property of

App. 35

the grantee, nor for damages to the property or injuries

to the person of the grantee’s officers, agents,

servants, or employees, or others who may be on said

premises at their invitation or the invitation of any one

of them, arising from or incident to government

activities, and the grantee shall hold the United States

harmless from any and all such claims.

Def.’s Ex. 26 at 64.

Defendant asserts that the release language in the

Easement precludes plaintiff's takings suit because the

language shields the government from all liability. Plaintiff

counterargues that this language does not preclude lawsuit

because defendant has not shown that the City agreed to the

terms of the release.

In general, a release will operate to discharge the

government from ail claims arising under the applicable

agreement. Dairyland Power Co-op. v. United States, 16

F.3d 1197, 1203 (Fed. Cir. 1994) (finding that because a

valid release was executed, plaintiff's claim for contract

damages was barred); Kenbridge Construction Co. v. United

States, 28 Fed. Cl. 762, 765 (1993) (citations omitted). “A

_ release may .. . preclude the later assertion of a takings claim

when ‘circumstances indicate that a release of a takings claim

had been contemplated and bargained for.” Henderson

County Drainage District No. 3 v. United States, 60 Fed. Cl.

748, 752 (2004) (citing Henderson County Drainage District

No. 3 v. United States, 55 Fed. Cl. 334, 343 (2003)

(Henderson I). \n the case of government contracts, a

contractor’s execution of a release that is complete on its face

reflects the contractors unqualified acceptance and

~greement with its terms and is binding on both parties.

Kenbridge Construction, 28 Fed. Cl. at 765 (citing B.D. Click

Co. v. United States, 614 F.2d 748, 756, 222 Ct. Cl. 290 (Ct.

Cl. 1980)). However, also in the case of government

App. 36

contracts, tiuere are special and limited circumstances under

which a claim may be prosecuted despite the execution of a

release. /d. (citing Mingus Constructors, Inc. v. United

States, 812 F.2d 1387, 1395 (Fed. Cir. 1987)). These include

mutual mistake, conduct of the parties acknowledging claims

after a release, obvious mistake or oversight, and fraud or

duress. /d.

In interpreting a release, the court must first ascertain

whether the language clearly bars the asserted claim. King v.

Dept. of the Navy, 130 F.3d 1031, 1033 (Fed. Cir. 1997),

aff'd afier remand, \78 F.3d 1313 (Fed. Cir. 1999) (table). If

the provisions are clear and unambiguous, they must be given

their plain and ordinary meaning. McAbee Construction, 97

F.3d at 1435; Alaska Lumber & Pulp. Co., Inc. v. Madigan, 2

F.3d 389, 392 (Fed. Cir. 1993). The parol evidence rule

forbids the admission of additional evidence when language

of an easement is complete and unambiguous, and when there

is no contention that the easement was executed as a result of

fraud, accident or mistake. McAbee Construction, 97 F.3d at

1435 (finding no ambiguity in easement language expressly

permitting the Corps to deposit and fill waste on plaintiff's

land and to perform any other work necessary and incident to

the Corps’ dam replacement project).

For example, in Bistline v. United States, the Court of

Claims found that the release clause in an easement barred

plaintiffs’ claim for inverse condemnation. Bistline v. United

States, 640 F.2d 1270, 1274, 226 Ct. Cl. 282 (Ct. Cl. 1981).

There, plaintiffs claimed that the construction and operation

of the Albeni Falls Dam project by the Corps caused their

property to wash away and erode. In particular, the taking of

plaintiffs’ property occurred when adverse storm winds,

coupled with project waters, cut away the banks of plaintiffs’

land above the limits of the flowage easement held by the

government and washed portions of their property into the

reservoir maintained by the Corps. The flowage easement

App. 37

contained a clause releasing the government from damages

by reason of the overflow of water caused by the construction

and operation of the Albeni Falls project. The court there

found that the release barred plaintiffs’ takings claim. /d. at

1275. The affidavits presented demonstrated that the amount

paid for the easements, approximately $20,000, was to

compensate owners for the actual flooding and taking of land

lying below an elevation of 2062.5 feet. In addition, the

court found that the language in the easement granted the

government the perpetual right to intermittently overflow,

flood and submerge all of the subject land lying above and

below the 2062.5 elevation mark. /d. at 1274. The release

clause did not specify that the right to the intermittent

flooding of the land was limited to a specific contour

elevation. /d. The general release language relieved the

government from “all claims and damages that have accrued

or may hereafter accrue to any or all of the above described

lands by reason of the overflow of water occasioned by the

construction and operation” of the project. /d. The court

found this language to completely and unambiguously bar

plaintiffs’ claim.

If a release is ambiguous as to the scope of its coverage,

the court will construe the language to effect the parties’

intent at the time they executed the release and allow the

introduction of parol evidence to determine that intent. Cray

Research, Inc. v. United States, 41 Fed. Cl. 427, 436 (1998)

(“If a written contract is unclear, or not integrated, prior or

contemporaneous extrinsic evidence that does not contradict

the written language of the contract may be introduced to

establish its meaning.”); see also Dureiko v. United States,

209 F.3d 1345, 1356 (Fed. Cir. 2000) (finding the phrase

“demolition and removal” contained in a release to be

ambiguous since the phrase could refer to the government’s

removal of debris pertaining to the removal of mobile homes,

or the removal of any debris). For example, in Henderson

County Drainage District No. 3, 60 Fed. Cl. at 750, the Corps

App. 38

built a nine-foot Navigation Project in the Upper Mississippi

River. In order to support commercial river traffic, the Corps

maintained a nine-foot channel depth using a series of locks

and dams to control pool levels. During high-water flow

conditions and flogd events, the lock and dam controls were

taken out of operation, and the river ran in its natural state.

From the late 1930’s until the 1950’s, the United States made

annual payments te-fifteen drainage districts for additional

pumping costs incurred by the drainage districts due to the

high river stages caused by the project. Congress authorized

payments to the drainage districts in exchange for releases

waiving future claims arising out of the operation and

maintenance of the Navigation Project. Plaintiffs filed a

takings claim asserting that the operation of the Navigation

Project by the Corps caused excess seepage from the

Mississippi River. This, plaintiffs alleged, triggered

additional pumping costs within the drainage districts and left

the Henderson County levee severely eroded. /d. at 751. The

government argued that the takings claim was barred by the

releases. However, the court found that the releases did not

bar plaintiffs’ takings claim because there was no specific

language explicitly stating that plaintiffs’ takings claims were

barred. /d. The ambiguity of the release’s scope of coverage

forced the court, in the absence of evidence of the parties’

mutual intent, to construe the language against the drafter.

Id. at 757.

Because plaintiff is challenging its assent to the terms of

the Easement, the court must address whether a valid

easement was assented to by the parties in this case.

Acceptance requires 4 manifestation of assent to the terms

made by the offeree in a manner invited or required by an

offeror. Anderson v. United States, 344 F.3d 1343, 1355

(Fed. Cir. 2003) (for acceptance to occur, there must be a

manifestation of an intent to agree to the terms offered, such

as, in the case of Winstar-related claims, documents

containing statements evidencing the government’s promise

’

App. 39

to permit the amortization of goodwill) (citing Restatement

. (Second) of Contracts § 18 (1981)). Generally, “[a] person’s

Signature on a written instrument normally indicates assent to

the terms of that document.” Nicholson v. United States, 29

Fed. Cl. 180, 188 (1993) (in the context of debt instruments

finding valid debt agreement was created, even though

plaintiff asserted that she never acceded to the placement of

certain property as collateral, since plaintiff's signature on

agreement unequivocally showed assent to terms of the debt

agreement); Carpenter v. United States, 4 Cl. Ct. 705, 714

(1984) (in the context of trust agreements - finding that

signature on trust created valid trust agreement since

agreement expressly declared intent to create a trust and

convey interest) (citing Rossi v. Douglas, 203 Md. 190, 199,

100 A.2d 3, 7 (1953)).

Defendant contends that the City assented to the terms of

the Easement when, on January 30, 1978, Mayor Klein

executed an Assurance of Compliance Under Title V1 of the

Civil Rights Act of 1964, which purportedly was Exhibit C of

the Easement. It is not explicitly clear from the Easement

language whether the City’s signature on the Assurance

demonstrated assent to the terms of the Easement. In other

words, it is not clear that the Easement, combined with the

Assurance, constitutes one complete, integrated document,

especially in light of the fact that (1) the Assurance was

signed in 1978, five years after the first easement was

drafted, and (2) the Assurance refers to the unrelated issue of

civil rights.

Parol evidence is admissible to show the extent to which

a written agreement is integrated. McAbee Construction, 97

F.3d at 1434 (citations omitted); Sylvania Electric Products,

Inc. v. United States, 458 F.2d 994, 1006, 198 Ct. Cl. 106

(Ct. Cl. 1972); Coggeshall Development Corp. v. United

States, 29 Fed. Cl. 264, 269 (1993) (the court may consider

both the document itself and extrinsic evidence to determine

App. 40

whether parties intended for the deed to be a final, integrated

document). A fully integrated writing is one where the

parties have agreed that all of the terms and conditions were

expressly contained within the four corners of the document

itself. McAbee, 97 F.3d at 1434. In McAbee, the court found

that the United States made no represeniation or promise that

was not already expressly contained in the easement at issue.

ld. The plaintiff thus carried an extremely heavy burden in

overcoming that attestation to the document’s finality and

completeness. Jd.

Defendant has an extremely heavy burden to overcome

here as well. As far as integration of the Assurance with the

Easement, defendant has not demonstrated that the Assurance

was integrated with the Easement in such a way that the

City’s assent to the terms of the Assurance would also

represent its assent to the terms of the Easement. Neither

party has demonstrated that the Assurance was integrated into

the-Easement. The Easement contains no references to any

external documents or agreements. See United States v.

Winstar, 518 U.S. 839, 860-70, 135 L. Ed. 2d 964, 116 S. Ct.

2432 (1996) (for a discussion on integration). The execution

of the Assurance does not validate the Easement without

proof of that intent, which is lacking here.

Finding that the City’s signature on the Assurance does

not constitute aceeptanee of the terms of the Easement, the

next inquiry for the court is to determine whether the City

should be estopped from asserting that the release language is

inapplicable. The court is of the opinion that the facts and

contentions which the government has set forth in its

pleadings to raise an affirmative defense of laches are just as,

if not more so, appropriately characterized as equitable

estoppel. The government’s reply and opposition to

plaintifF’s motion for summary judgment, while

characterizing its affirmative defense as “laches”, set forth

App. 41

the basic foundation for an assertion of equitable estoppel

when it stated:

Here, the City failed to come forward in a timely

fashion after it received the easement in 1978 and

assert that it did not agree to the hold harmless clause.

Instead, the City stayed silent for 24 years .... Here

the doctrine of laches must be found to bar the City’s

assertion at this late date that it did not agree to the

terms of the easement.... In any case, its effort to

disclaim the easement some 24 years after the fact,

and mount a collateral attack on the terms of the

easement, should be rejected.

Def.’s Reply on its Mot. to Dismiss at 7-8. Thus, the court

believes that the facts upon which the government asserts a

laches defense are appropriately characterized as equitable

estoppel, and the pertinent inquiry is whether the City is

estopped from asserting that it did not agree to the terms of

the Easentent.

As was the case with defendant’s laches defense, the

government did not originally raise the defense of estoppel

and this defense is generally waived if not raised in

defendant’s answer.'' See Crocker v. United States, 127 F.

'' The court observes that the manner in which this case has

evolved did not lend itself to the assertion of the affirmative

defense of laches or equitable estoppel in the government’s

answer. fn the first place, the complaint made no mention of any

easement, but rather simply stated that the City constructed a water

supply system in the Reservoir and that defendant’s operation of

the Dam and Reservoir caused such severe damage to the pipeline

system as to constitute a taking. In its answer, defendant set forth

the following as one of its “Affirmative Defenses”:

In an easement granted by defendant to plaintiff which

enabled plaintiff, in whole or in part, to construct, maintain,

(continued...)

App. 42

Supp. 568, 573, 130 Ct. Cl. 567 (Ct. Cl. 1955); RCFC 8(c).

In other words, it must be affirmatively plead by defendant or

else it is deemed to be waived. /d. However, the court has

the power to the raise issues sua sponte when it is in judicial

interest to do so. See Orlando Helicopter Airways, Inc. v.

Widnall, 51 F.3d 258, 260 (Fed. Cir. 1995) (the court has

power to raise jurisdictional issues sua sponte); Hermes

Consolidated, Inc. v. United States, 58 Fed. Cl. 3, 20 n.21

(2003) (court may raise affirmative defense of laches sua

sponte); Southern Cal. Fed. Savings & Loan Assoc. v. United

States, 52 Fed. Cl. 444, 452 (2002) (court may raise

jurisdictional issues, such as statute of limitations, sua

sponte); DiLiberti v. United States, 2 Cl. Ct. 404, 409 (1983)

(“A judge may dismiss a suit sua sponte ... in order to

achieve orderly and expeditious disposition of cases.”) (citing

Lopez v. Ark. County Independent School Districi, 570 F.2d

541 (5th Cir. 1978)); see also RCFC 41(b).

Furthermore, the purpose of Rule 8&(c) is simply to

guarantee that the opposing party has notice of any additional

issue that may be raised at trial so that the party is prepared to

properly litigate it. A/-Kurdi, 25 Cl. Ct. at 604 (citing Hassan

and operate the water facilities alleged in plaintiff's com-

plaint, plaintiff agreed that the United States shall not be

responsible for any property damage to plaintiff's property

and that plaintiff will hold the United States harmless for

any claim of damage.

Def.’s Answer p. 2, P 1. Not until plaintiff filed its brief in

opposition to the government’s motion to dismiss and motion for

summary judgment was any challenge made by plaintiff to the

validity of the Corps’ Easement. Thus, the first occasion that the

government woulc have had to assert the affirmative defense of

equitable estoppel would have been well after defendant's answer

was filed.

App. 43

v. United States Postal Service, 842 F.2d 260, 263 (1 \th Cir.

1988)). Failure to plead an affirmative defense does not

automatically extinguish the defense. See Cities Serv. Helex,

Inc. v. United States, 543 F.2d 1306, 1313 n.14, 211 Ct. Cl.

222 (Ct. Cl. 1976). In general, a court may allow a non-plead

affirmative defense to be raised if it would not result in

prejudice to the party. See id. (finding that “since the

plaintiffs have ably and thoroughly responded to the

Government’s arguments, showing no prejudice from the

injection of the issue at this stage, and all parties have

exhaustively treated it, we will consider the defense on the

merits’’).

In this instance, no prejudice has resulted with respect to

the inquiry as to whether the defense of equitable estoppel

applies to bar plaintiff's claim since the court has given both

parties a full opportunity to adequately brief the issue per this

court’s December 22, 2004 order.'? See Al-Kurdi, 25 Cl. Ct.

at 604 (“Plaintiff was not prejudiced by defendant’s failure to

assert the affirmative defense of statute of frauds [since]

plaintiff has adequately argued against defendant’s motion

for summary judgment.”). The court does not deem that

further discovery would be needed as to this issue.

“It has long been a standing principle in this court that the

conduct and admissions of a party operate against him in the

nature of an estoppel when the other party detrimentally

relies upon that conduct of those admissions.” Weir v. United

States, 474 F.2d 617, 622, 200 Ct. Cl. 501 (Ct. Cl. 1973)

(citing Mahoning Investment Co. v. United States, 3 F. Supp.

? The court also requested that the parties brief the issue as to

whether the doctrine of ratification would apply to bar plaintiff's

claim. Having reviewed the parties’ submissions to the court on

this particular issue, the court concurs with the parties and finds the

doctrine of ratification inapplicable to this matter.

App. 44

622, 629, 78 Ct. Cl. 231 (Ct. Cl. 1933), cert. denied, 291 U.S.

675, 78 L. Ed. 1064, 54 S. Ct. 526 (1934)). The doctrine of

equitable estoppel bars a party from raising a defense or an

objection it otherwise would have. Biagioli v. United States,

2 Cl. Ct. 304, 307 (1983) (quoting Jablon v. United States,

657 F.2d 1064, 1068 (9th Cir. 1981)). The affirmative

defense of equitable estoppel requires that the asserting party

had reasonably relied upon the conduct of the estopped party.

Henry v. United States, 870 F.2d 634, 636-37 (Fed. Cir.

1989). The elements of equitable estoppel are: (1)

misleading conduct, which may include not only statements

and action but silence and inaction, leading another to

reasonably infer that rights will not be asserted against it; (2)

reliance upon this conduct; and (3) due to this reliance,

material prejudice if the delayed assertion of such nghts ts

permitted. Lincoln Logs Lid., 97\ F.2d at 734; see also A.C.

Aukerman Co. v. R.L. Chaides Constr. Co., 960 F.2d 1020,

104t (Fed. Cir. 1992) (stating that this formulation of the

three elements of equitable estoppei “reflects a reasonable

and fairly complete distillation from the case law”). An

explicit representation is not a necessary precondition for a

finding of equitable estoppel. Hercules Inc. v. United States,

49 Fed Cl. 80, 88 (2001), aff'd, 292 F.3d 1378 (Fed. Cir.

2002). Estoppel can lie for a course of conduct, without

misrepresentation, by the estopped party. /d. ““This latter

view is in accord with those cases that hold that a party who

engages in a course of conduct, even without

misrepresentation, upon which another party has a right to

believe he is intended to act or upon which the first party

inte:ids him to act, will be estopped from repudiating the

effect of such conduct.”” /d. (citing Emeco Indus., Inc. v.

United States, 485 F.2d 652, 657, 202 Ct. Cl. 1006 (Ct. Cl.

1973)).

In another arena, in Salla v. United States, the Court of

Claims considered the doctrine of estoppel with respect to a

claim for civilian pay. 228 Ct. Cl. 744 (1981). There,

. * o

ra!

App. 45

plaintiff claimed that he performed the duties of a GS-15

position while being classified and paid at a GS-14 level

while serving as a program officer. The Court of Claims

found that because the plaintiff was never appointed to a GS-

15 position as program officer, his performance of GS-15

duties did not entitle him to receive the salary of GS-15. Jd.

at 746. The court also found that plaintiff was estopped from

attacking the legality of a constructive detail as a GS-15 since

he willingly served as a program officer. “Having accepted

the benefits of the detail [one such benefit was the retention

of his prospects for promotion], plaintiff is now estopped to

attack its legality.” Jd. at 747; see also Peters v. United

States, 534 F.2d 232, 235, 208 Ct. Cl. 373 (Ct. Cl. 1975)

(plaintiff was estopped from attacking legality of detail as

acting Deputy General Counsel at tue Federal Aviation

Administration, allegedly entitling plaintiff to higher pay,

since plaintiff was never officially appointed to the position

and he accepted benefits from the detail for over two years

without complaint).

In this instance, despite the fact that plaintiff did not sign

the Easement and alleges that it did not agree to its terms, the

court finds that plaintiff should be estopped from asserting

that the release from liability language contained in the

Easement does not apply. The documents produced by the

parties demonstrate that on July 25, 1973, the Corps

forwarded the City a proposed easement granting the City a

right-of-access across the Corps’ land. Although, the City

did not receive a final easement based on this proposal, it

commenced construction of the water transmission system in

1973 and completed construction in mid-1975. The City

clearly knew that it did not have a fully executed easement,

evidenced by the fact that it wrote to the Corps a number of

times demanding a copy of the final, signed easement; yet it,

nonetheless, commenced with construction of the water

intake system. The Corps formally issued the Easement on

March 7, 1978, which plaintiff acknowledged receiving on

App. 46

October 16, 1978, three years after the City had completed

construction of the water system. Although the City did not

sign the Easement and did not specifically acknowledge

acceptance of its specific terms via a signature, the court

finds that the construction and continued operation of the

water intake structure precludes the City from asserting that it

never consented to the terms of the Easement. This is

especially true in light of the fact the City additionally sought

a permit and license for the construction and, most

importantly, transported water from the Reservoir until 1997

when the City abandoned the water transmission system.

In reviewing the factors necessary to prove equitable

estoppel, the court finds, with respect to the first factor

identified (misleading conduct), the government was misled

by the City’s silence regarding its acceptance of the terms of

the Easement. Because the City did not inform the Corps of

its disapproval of the Easement’s terms, the Corps had no

knowledge nor any reason to be aware that the City would

challenge acceptance of the Easement at a later date. With

respect to the second factor (reliance upon the conduct), the

government clearly relied upon the City’s silence. The City

must have intended that the Easement would be honored by

the Corps once it built its water intake system, or else the

City’s structures would have been illegally situated in the

Reservoir. See 5.96 Acres of Land, 593 F.2d at 888. The

government had no reason to suspect that the City would

unexpectedly, decades after the water intake system was built

and had been used by the City without challenge, assert that

the it did not assent to the terms of the Easement. Finally,

with respect to the third factor (material prejudice), the

government would be prejudiced and injured if plaintiff were

allowed now, decades after the Easement was issued, to

declare the Easement unenforceable against it. The

government is harmed by the fact that the City challenges the

terms of the Easement, decades after the water intake system

was built and utilized, through the filing of this lawsuit for

App. 47

damage claims exceeding $ 1,000,000 due to be paid by the

government. In view of the foregoing, defendant has

demonstrated that all factors necessary to establish equitable

estoppel have been met.

Accordingly, because plaintiff is estopped from arguing

that it is not bound by the terms of the Easement because it

never signed the Easement, the court finds that the hold

harmless language contained in the Easement applies to

plaintiff. The hold harmless provisions of the Easement

contain unequivocal language that specifically precludes the

government’s liability for damages claimed here. As

previously discussed, the Easement states that “the United

States shall not be responsible for damages to property .. .

which may arise from or be incident to the use and

occupation of the said premises’’, nor for damages to the

property of the grantee, ... arising from or incident to

government activities, and the grantee shall hold the United

States harmless from any and all such claims.” Def.’s Ex. 26

at 64. This unequivocal language is broad enough in scope to

include any and all damages arising from the government’s

authorized operation of the Oahe Dam and Reservoir. Since

the Easement precludes recovery for damages to the City’s

property arising from the City’s occupation of the premises,

as well as those arising from or incident to government

activities, plaintiff's claim is barred with respect to damage to

'’ The “said premises” referred to in the Easement was

described in that document as land under the control of the

Secretary of the Army, the exact parameters of which were set

forth in drawings accompanying and made a part of the Easement.

Def.’s Ex. 26 at 63. The “government activity” referred to and

included the Corps’ raising and lowering of the water levels of the

Reservoir, which this court has already determined to have been a

legitimate governmental activity.

App. 48

all structures claimed, whether residing in the waters of the

United States or on adjacent property.

b. The City’s Adhesion Contract Argument

In addition to challenging the validity of the Easement,

the City also alleges that the Easement is void as an

unconscionable adhesion contract. In particular, the City

claims that the Easement was a form unilaterally drafted by

the Corps and presented to the City on a take-it-or-leave-it

basis. The City claims that the correspondence between the

parties shows that the City had no input into the terms of the

Easement and that no negotiation occurred between the

parties. The City alleges that the Corps held all of the

bargaining power in the transaction and that if the City had

objected to the release language in the Easement, the Corps

would not have granted the City the necessary Easement. |

As a preliminary matter, the court again observes that if

there had been no valid Easement, then the City’s water

system would have been trespassing on property of the

United States. See 5.96 Acres of Land, 593 F.2d at 888. The

structures would therefore have been unlawful, thus

undermining the City’s entire takings claim. /d. It is a non

sequitur for the City to assert on the one hand that_ the

Easement validly permitted the City to operate and maintain

structures on the Reservoir bed, but then argue that the

Easement was an unconscionable adhesion contract, without

effect. The City is attempting to manipulate the facts herein

to serve both its purposes - proving that compensable damage

occurred to structures that the Easement permitted to be built

and utilized, but then negating the validity of that very same

Easement with the argument that the Easement constituted an

adhesion contract that should not be upheld. The two

contentions, however, are incompatible and cannot

functionally co-exist. —

App. 49

Plaintiff's argument in this regard is ill-founded and the

City has not offered sufficient evidence that the Easement

was a contract of adhesion. An adhesion contract is a form of

contract unilaterally drafted by one party and presented to the

other party on a “take-it-or-leave-it” basis. Nebco & Assoc.

v. United States, 23 Cl. Ct. 635, 645 (1991) (citing Colorado

law). In Nebco, the Claims Court found that the contract at

issue there, an agreement with the Small Business

Administration, did not constitute a contract of adhesion

when plaintiff did not show (1) a great disparity in the

parties’ bargaining power; (2) that plaintiff was not given an

opportunity for input or negotiation; and (3) in that instance,

that plaintiff could not have obtained adequate property

elsewhere. /d. The plaintiff in Nebco offered no proof or

evidence that it had inadequate bargaining power. In fact, the

court found that the plaintiff there was in the business of

buying and selling real estate, and the plaintiff itself had

established the contract price. See also Seaboard Lumber

Co. v. United States, 903 F.2d 1560, 1565-66 (Fed. Cir.

1990) (the bare fact that a government contract is on a “take-

it-or-leave-it” basis does not necessarily constitute a contract

of adhesion so as to invalidate a contract’s provision waiving

the right to a jury trial since the private party was not

compelled or coerced into making a contract with the

government and that party voluntarily entered into the

contract), cert denied, 499 U.S. 919, 113 L. Ed. 2d 243, 111

S. Ct. 1308 (1991); National By-Products, Inc. v. United

States, 405 F.2d 1256, 1267, 186 Ct. Cl. 546 (Ct. Cl. 1969)

(finding no uneven bargaining power or overreaching by the

government with respect to an informal agreement to

construct a levee since contract was a result of mutual

drafting and that document was a type common to private

land transactions, rather than unique to government practice).

But see Sandnes’ Sons, Inc. v. United States, 462 F.2d 1388,

1392, 199 Ct. Cl. 107 (Ct. Cl. 1972) (stating that there is

presumption against waiver of constitutional rights with

respect 16 government contracts, since government contracts

App. 50

tend to be ones of adhesion - in the issue of whether plaintiff

voluntarily entered into contracts subject to the Renegotiation

Act)."*

Here, plaintiff contends that the Easement was an

adhesion contract, but offers scant evidence to support its

position. Although the Easement was presented on a take-it-

or-leave-it basis, as suggested in an August |, 1997 letter sent

by the Corps in anticipation of litigation indicating that the

release language was boilerplate, this fact alone is not enough

to support a claim of adhesion. The court in Nebco stated

that:

Even had the contract been offered on a “take-it-or-

leave-it” basis, plaintiff would need to show more to

prove adhesion. First, plaintiff must show a great

disparity in the parties’ bargaining power. Second,

plaintiff must show that it was not given an

opportunity for input or negotiation. Finally plaintiff

must show that it could not have obtained adequate

property elsewhere.

'4 However, Chief Judge Cowen found, in his separate

opinion, that since plaintiff voluntarily entered into renegotiable

contracts, was charged with knowledge of their terms, and received

benefit from the contracts, the contracts were not ones of adhesion,

even if fully drafted by the government and plaintiff had no

opportunity to object to provisions, since plaintiff was under no

obligation to do business with the government. 462 F.2d at 1396.

By entering into the contracts, plaintiff waived its right to

challenge, on due process grounds, the renegotiation procedures

referenced in its contracts voluntarily executed by plaintiff,

especially since, Chief Judge Cowen found, the provision imposed

was in furtherance of an important governmental policy. /d. at

1397.

App. 51

Nebco, 23 Cl. Ct. at 645. In this instance, while the court

finds that there was a disparity in the bargaining power of the

parties, with the government, of course, being in a much

more powerful position,'? the court does not find that the last

two conditions necessary to establish an adhesion contract

fall in plaintiff's favor. Plaintiff also has not shown that it

was not given an opportunity for input or negotiation. The

evidence indicates that the City had ample input into the

terms of the Easement. On July 20, 1973, the Corps sent

Mayor Klein a proposed easement which he was asked to

review and indicate whether the City approved. In an August

28, 1973 letter to the Corps, Mayor Klein stated that the City

of Gettysburg agreed with the terms and conditions contained

in that iteration of the proposed easement. In none of the

correspondence produced by the parties is it shown that the

City was ever denied an opportunity to negotiate the terms of

the Easement to address specific concerns the City might

have had. Plaintiff also has not shown that it could not have

obtained water elsewhere. Actually, the record before the

court reflects that plaintiff had alternative water sources

available to it at the time that it was conducting its studies

into potential ground water sources. A study conducted by

J.D. effort indicated at least three possible areas that would

As indicated in the numerous pieces of correspondence

back and forth between the City and the Corps, the Corps was

required to and did, in fact, follow strict regulations in the

processing and approval of the City’s requests for the license,

permit and easement. Inasmuch as the Corps’ role in this process

was relegated primarily to ensuring that both parties were in

compliance with federal regulations which controlled how, when

and under what circumstances easements (as well as licenses and

permits) could be issued to local municipalities, the existence of

this strict regulatory scheme superimposed strict controls which, on

a practical level, severely limited the Corps’ ability to wield

discretionary power.

App. 52

have qualified as potential sources for ground water. PI.’s

Brief in Opp. to Def.’s Mot. to Dismiss at Tab 1, Ex. A at

1,12. The City was not forced to utilize the Reservoir as its

only possible source for water.

In further contradiction to plaintiff's allegation of an

adhesion contract, the court observes that the United States

has the power to place reasonable conditions on the use of its

property in the same manner as a private property owner may

condition the use of his real or personal property, although,

unlike a private individual, government actions must go a

step further and must also reasonably further a valid public

purpose. See 5.96 Acres of Land, 593 F.2d at 890 (citations

omitted). The 5.96 Acres of Land court, in citing Boston

Edison Cov. Great Lakes Dredge & Dock Co., 423 F.2d 891

(ist Cir. 1970), discussed that a release clause contained in a

permit was not against public policy (as a result of the

parties’ unequal bargaining power) since the insertion of the

clause was allowable under the Secretary of the Army’s

discretion under 33 U.S.C. § 1.'° The Boston Edison Court

noted that if the release from liability clause was thought to

be against public policy, then Congress, through legislation,

could enunciate that policy. 423 F.2d at 897. Thus, the 5.96

Acres of Land court held that the condition at issue there,

exculpatory clauses contained in a permit, simply placed

upon the permittee the risk of damage to the permitted

It shall be the duty of the Secretary of the Army to

prescribe such regulations for the use, administration, and

navigation of the navigable waters of the United States as

in his judgment the public necessity may require for the

protection of life and property, or of operations of the

United States in channel improvement... .

33 U.S.C. § 1.

App. 53

structure. 593 F.2d at 890. The court found such a clause to

be valid when the United States is discharging its special

duties and responsibilities over navigable waters. /d.

Furthermore, the 5.96 Acres of Land court noted that the

damage that occurred therein was an_ unavoidable

consequence of a project undertaken to further the public

good - that being the Corps’ construction of the Bonneville

Dam’s powerhouse project. Thus, the court noted, the policy

supporting insulating the government from liability was a

strong one. /d. at 891.

In this instance, it is undisputed that the Corps’ operation

of the Oahe Dam was fot <he public good and in the public

interest. See Flood Control Act of 1944, Pub. L. No. 534, 58

Stat. 887-88 (codified as amended in scattered sections of 33

U.S.C. §§ 701-1, et seg. (1952)). The Corps raised and

lowered water levels in the dam for the purpose of flood

control and for maintaining adequate water supplies. See

discussion supra Section II.A.1. Furthermore, the Corps is

vested with the power to grant easements for right-of-ways

for water pipelines provided that such grants will be in the

public interest. See 10 U.S.C. § 2669; 33 C.F.R. §§ 211.6,

320.1 (2004). There is no indication that the Easement, with

the included release from liability clause, was beyond the

scope of the Corps’ authority, and no support for plaintiffs

contention that the Easement created a contract of adhesion

between the government and the city.

App. 54

2. Applicability of the License’s Release Clause

The parties do not spend a considerable amount of time

discussing whether the release language contained in the

License applies in this matter.’ The License specifically

granted the City a two-year license to create a temporary

construction area for the construction and installation of the

water transmission system. The License authorized the City

to occupy the above-referenced government property on the

shores of the Reservoir as a construction site for the water

intake structure and pumping station. Whereas the Easement

gives the City the right to maintain the pipeline and pumping

station on land owned by the government, the License simply

allowed the City to occupy government land adjacent to the

Reservoir to facilitate construction of the system.

The only issue the parties have addressed with respect to

the License is whether the City assented to the terms of the

License. However, assuming there exists a valid instrument,

the parties fail to discuss whether the hold harmless language

in the License limits the government’s liability in this matter.

'7 This clause states:

That the United States shal! not be responsible for damages

to property or injuries to persons which may arise from or

be incident to the exercise of the privileges herein granted,

or for damages to the property of the licensee, or for

injuries to the person of the licensee, or for damages to the

property or injuries to the person of the licensee’s officers,

agents, servants, or employees, or others who may be on

said premises at their invitation or the invitation of any one

of them, arising from or inciderit to governmental activities

on the said premises, and the licensee shall hold the United

States harmless from any and all such claims.

Def. s Ex. 27 P 4.

App. 55

Irrespective of whether the parties agreed to the terms of the

License,. the court finds that the License is inapplicable to

determining the instant motion. The License was for a two-

year, limited term which expired well before the alleged

damage to plaintiffs water intake system. Thus, to the extent

that the hold harmless language would apply in the given

matter, it would only have applied during the term of the

License. Accordingly, the court finds that the License is not

pertinent to determining the government’s ability for

plaintiff's alleged damages.

3. Applicability of the Permit’s Release Clause

This court has already addressed whether the Permit

affords the City a sufficient cognizable property interest to

assert its takings claim. See discussion supra Sec. I1.A.1.

Thus, the issue now to be determined is whether the release

language in the Permit bars the City’s claims. The validity

and execution of the Permit is not challenged by the parties.

The parties agree that a Section 10 Permit was signed by

Mayor Klein on November 14, 1973. Paragraph (j) of the

Permit provides:

That the United States shall in no way be liable

for any damage to any structure or work

authorized herein which may be caused by or

result from future operations undertaken by the

Government in the public interest.

Det.’s Ex. 10 at 36. The term “public interest” is broadly

defined in the Permit as including, but not limited to, a

consideration of the following factors: navigation, fish and

wildlife, water quality, economics, conservation, aesthetics,

recreation, water supply, flood damage, prevention,

App. 56

ecosystems, and, in general, the needs and welfare of the

: people.’ Id. at 39.

Defendant argues that this language expressly precludes

any lawsuit against the government because the clause places

upon the City, not the United States, the risk of damage to the

permitted structures resulting from activities of the United

States taken in the public interest. Defendant argues that

because plaintiff alleges that the landslides damaging the

water transmission system were caused by the Corps’

“construction, management and operation of the Oahe Dam,”

the City has waived its ability to assert the cause of action

against the government as~set forth in the complaint.

Defendant further argues that because the government’s

action of raising and lowering the water levels in the

Reservoir was a legitimate government action, and

legitimately for a public purpose, then the above-quoted

release language specifically precludes suit.

Plaintiff, on the other hand, argues that the Permit only

precludes liability for damage “to any structure or work

authorized” by the Permit. Def.’s Ex. 10 at 36. The only

structure, the City contends, authorized by the Permit was

“laying an intake line and constructing a pumphouse.” /d.

Accordingly, plaintiff claims that the release applies only to

damage to the intake structure and the pumphouse. It does

'8 The court finds that the term “public interest” includes the

Corps’ operation of the Reservoir, including the raising and

lowering of water levels for flood control and water supply

purposes. This court has already determined that the Corps’

operation of the Oahe Dam was in the public interest. See

discussion supra Sec. II.A.1.

App. 57

not account for damage to the water transmission pipeline not

under the scope of the Permit.'” Def.’s Ex. 10 at 40.

The Permit specifies exactly what work was authorized to

be conducted by that instrument. The Section 10 Permit

specifically authorized the City to:

Construct and maintain a water intake structure

approximately 14 miles west and 1 miles north of

Gettysburg, South Dakota, and approximately | miles

up the Cheyenne Creek arm of Lake Oahe from

Missouri River mile 1152.5 (1960 mileage). The

work is to consist of laying an intake line and

constructing a pumphouse. A 12-inch casing is to be

placed from the intake opening in the reservoir

through a bored shaft initiating in the reservoir at an

elevation of 1553’, rising up a slope, through a knoll,

and to a pumphouse. The elevation of the pumphouse

is to be approximately 1625 feet. The water intake

system is to be provided with screens with mesh

openings of not more than .14” and approach velocity

of not more than .5 feet per second immediately in

front of the screens. All areas disturbed by

construction are to be returned to natural grade and

reseeded[. |

Def.’s Ex. 10 at 35.

The court finds the above-quoted language to be

unambiguous. The plain meaning of the clause “structure or

work authorized herein” is the construction of the water

'’ In fact, the City’s takings claim is solely for damage to that

part of the underground transmission pipeline running east from

the pumphouse up the Reservoir slope. PI.’s Statement of

Uncontroverted Fact PP 43-44.

App. 58

intake structure and the pumphouse, and the laying of an

intake line, as described above. Def.’s Ex. 18 at 51. The

Permit: authorized the City to construct and operate these

three items. The Permit does not suggest that any other

structure or work be accomplished by virtue of the grant of

the Permit. The Permit very clearly states that it authorizes

the City to “construct and maintain a water intake structure”

and conduct “work . . . consisting of laying an intake line and

constructing a pumphouse.” Def.’s Ex. 10 at 34. There is

nothing ambiguous in this language. It is clear that the water

intake structure was the structure exiting the Reservoir and

connected to the pumphouse on the east bank of the

Reservoir. The release clause unequivocally releases the

government from liability for damages to the water intake

structure, the pumphouse and the intake line that occurred as

a result from the operation of the Reservoir. Accordingly, the

court finds, based on the unambiguous plain language of the

Permit, that the City’s claim is denied with respect to damage

to structures identified in the Permit.

With respect to any additional structures not falling under

the ambit of the Permit, such as the water pipelines located

on non-government owned land leading from the water

treatment facility towards the City beyond the pumphouse,

those structures fall under the release language of the

Easement and, as previously discussed, recovery for that

damage is precluded. See discussion supra Sec.[1.B.1-a.

Accordingly, finding that the release language contained in

both the Permit and the Easement unambiguously limits

recovery for damage to the water intake system, plaintiffs

claim fails. |

CONCLUSION

For the following reasons, it is hereby ORDERED as

follows:

App. 59

(1) Defendant’s Motion to Dismiss Complaint For

Failure To State A Claim Or In The Alternative For

Summary Judgment, filed September 6, 2002, is

GRANTED.

(2) The Clerk’s office is DIRECTED to ENTER

judgment for defendant, dismissing plaintiff's

complaint; and

3) Each party shall bear its own costs.

LYNN J. BUSH

JUDGE

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